Diageo to buy controlling stake in Vijay Mallya's United Spirits Ltd for $ 1 bn

New Delhi: Vijay Mallya-owned United Breweries has reached a deal with the world's largest producer of spirits Diageo and the deal close to a billion dollars is expected to be announced on Friday. Diageo is likely to take the management control post the deal, while Mallya will continue to remain the chairman of United Spirits Limited.

The UB Group and Diageo finally agreed to sign the term-sheet for the United Spirits Limited stake sale and sources said that Diageo will likely take management control of the USL. The UB Group will be selling 27 per cent stake directly to Diageo, which will trigger a mandatory open offer.

Vijay Mallya had on Wednesday travelled to London and executives from both Diageo and UB Group, including the executive of USL, were in the city. Before it acquires the stake, Diageo wants all litigations and legal hurdles to be cleared out, added the sources.

Diageo is likely to take the management control post the deal, while Vijay Mallya will continue to remain the chairman of United Spirits.

In terms of pricing, it will be around Rs 1,500 per share, in line with street estimates. Diageo will acquire a majority stake in USL post the deal closure. The deal is expected to be completed in six months.

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