Diageo wants a larger stake of United Spirits

Global drinks group Diageo has received regulatory approval for an open offer to acquire a 26 percent stake in United Spirits for an estimated Rs 114.48 billion (EUR 1.4 billion/USD 1.9 billion), it was reported.

This is the second open offer made by Diageo to gain majority control in India’s number one spirits group.

The open offer, which was made in April, was cleared by the Securities and Exchange Board of India in May 2014, according to a public notification.

The global drinks group has more than doubled its offer per share compared to its previous bid last year.

If the offer is fully subscribed, Diageo’s vehicle Relay will hold 54.8 percent of United Spirits’ share capital and will have paid about EUR 2.2 billion for its total shareholding. Relay currently holds 28.8 percent.

The open offer is scheduled to start on 11 June and will close on 24 June 2014.

Diageo, which sells brands such as Smirnoff and Johnnie Walker, announced in 2012 it would pick up a 53.4 percent stake in United Spirits. However, the open offer Diageo made in April last year was met with a lukewarm response from shareholders and Relay only picked up a 25.02 percent stake, media reported.

Perhaps Diageo will get lucky this time.