Diageo Plc and United Spirits Ltd to benefit from Deal

Diageo Plc and United Spirits Ltd to benefit from Deal

Diageo Plc, which is accredited as the world's largest spirit maker, has announced that they are going to buy a stake in the United Spirits Ltd. Suspicions were going on in regard to the deal, but nothing was confirmed at that time.

However, it is now that both the companies have confirmed that the deal is going to take place. It is said that Diageo Plc, which is the maker of Johnnie Walker Scotch, is going to have a 53.4% stake in the United Spirits Ltd for which they are going to pay whooping 111.7 billion rupees.

It shall be noted that the stake being mentioned above will not be gained all together. Diageo Plc will take 27.4% stake initially and then will propose for other 26% stake. The deal is said to prove benificial for both the companies, as Diageo Plc will be able to enhance i its position in the business.

On the other hand, United Spirits Ltd has been facing neck deep financial problems. The deal will surely help them out. "Diageo will get a foothold into the company and the Indian market, and the Mallya group will get the money to pay the debt of Kingfisher", said Deven Choksey, who is positioned as the managing director at K. R. Choksey Shares & Securities Pvt.

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