Diageo has agreed to buy a majority stake in United Spirits Ltd, controlled by Vijay Mallya, for $2.1 billion, or Rs 11,000 crore, fuelling a push by the world's biggest spirits group into fast-growing markets.
However, the fate of his Kingfisher Airlines was not clear as Mallya chose to delink the United Spirits sale with the United Spirits deal.
He adopted a guarded approach on the issue of using the money received from Diageo to bail out the Kingfisher Airlines, which has been grounded since September 30.
Each individual company is a public entity. Kingfisher Airlines' issues will be resolved by Kingfisher Airlines and UB Holdings. It would be unfortunate if you try to link this transaction with the airline. Lets not cross contaminate everything and interrelate everything, Mallya said in a conference call after announcing the deal to sell United Spirits stake.
Diageo, which first tried to buy United Spirits in 2008, said on Friday it would end up with 53.4 percent of India's largest spirits company in a two-part deal.
The Johnnie Walker and Guinness owner has been focusing on emerging markets where a growing middle class is developing a taste for more expensive drinks. Diageo has also been in talks to buy leading tequila maker Jose Cuervo.
This (India) will become Diageo's number two market after the United States and if you look at the projections on what's happening with the emerging middle class...it has the potential in the long term to become our largest market, said Diageo Chief Operating Officer Ivan Menezes.
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