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Sep 25, 2012 at 10:40pm IST

Diageo in talks with Mallya's UB Group to acquire stake

Bangalore/London: Diageo and UB Group On Tuesday said they are in talks for a deal under which the UK-based drinks major may pick up stake in the latter's United Spirits, but maintained there is no certainty of the transaction.

"Both United Spirits and United Breweries Holdings have issued a statement this morning stating that they are in discussion with Diageo to potentially acquire a shareholding in United Spirits", UB group Chairman Vijay Mallya told reporters in Bangalore after the annual General Meeting of United Spirits.

Mallya added: "It is in discussion stage and there is no certainty that a transaction will be done".

Diageo in talks with United Spirits to acquire stake

Diageo is reported to be trying to buy a 15 pc stake from Mallya, who is said to be under pressure to raise capital for Kingfisher.

Earlier on Tuesday, United Spirits said in a filing to BSE: "United Spirits and Diageo Plc confirm that the UK-based company is in discussion with it and United Breweries Holdings in respect of possible transactions to acquire an interest in the liquor firm".

Mallya declined to take further questions on the subject, saying: "I am not prepared to go beyond that".

The UB group is the promoter of United Spirits with a 28 per cent stake.

In a short statement to the London Stock Exchange, Diageo said: "United Spirits Limited and Diageo plc confirm that Diageo plc is in discussion with United Spirits Limited and United Breweries (Holdings) Limited in respect of possible transactions for Diageo plc to acquire an interest in United Spirits Limited."

It added: "However there is no certainty that these discussions will lead to a transaction."

The two companies had discussed buying a stake in Mallya's company in 2009, but the talks were unsuccessful.

Diageo is reported to be trying to buy a 15 per cent stake from Vijay Mallya, who is said to be under pressure to raise capital for his Kingfisher airline.

Meanwhile, Mallya welcomed the recent burst of economic reforms announced by the government, saying they were very much overdue and in need, and expressed hope that there would be further reforms.

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