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Transactions
JANUARY 2013
dIaGEo acQUIRES StaKE In UnItEd SPIRItS
diageo Plc has acquired a 53.4 per cent stake in United Spirits Ltd, the leading Indian Spirits company.
Dr Vijay Mallya will continue in his current role as Chairman of USL, and UBHL and Dr Mallya will work with Diageo to build the USL business as the current consumer trends for premiumisation accelerate in India.
According to a press release from Diago, the agreements were in two parts:
- An agreement to acquire a 19.3% interest in the current share capital of USL at a price of INR 1440 per share from the UBHL group, the USL Benefit Trust, Palmer Investment Group Limited and UB Sports Management (two subsidiaries of USL) and SWEW Benefit Company (a company established for the benefit of certain USL employees). Following this disposal, the UBHL group would continue to have a shareholding in USL amounting to 14.9% of current share capital.
- The shareholders of USL were asked to approve the preferential allotment to Diageo at a price of INR 1440 per share of new shares amounting to 10% of the post-issue enlarged share capital of USL.
The deal, which was originally alluded to in September, is the largest inbound Indian M&A deal since British oil firm Cairn Energy Plc sold a majority stake in its Indian business to Vedanta Resources Plc in 2011.
The two companies said in September that they were in talks about a possible deal. LM
InFInItI REtaIL acQUIRES IndIan BUSInESS oF WooLWoRtHS
Infiniti Retail, Tata Sons’ wholly owned subsidiary that runs Croma consumer electronic goods chain, has acquired Australian major Woolworths Wholesale’s Indian arm for around Rs200 crore.
The acquired company has been a supplier to Infiniti for six years.
Ajit Joshi, CEO of Infiniti Retail, said: “Once the deal is complete, we will merge Woolworths Wholesale India into Infiniti. We will also take their employees under our wing. With this buy, the total funding by Tata Sons in Infiniti has touched Rs700 crore.”
The acquisition gives Infiniti full control over its back-end operations.
The sale is part of Woolworths’ global restructuring plan. Ramnik Narsey, chairman of its India unit, said. “With our decision to exit the consumer electronics specialty store sector in Australia and New Zealand, we have decided to sell the wholesale business in India to Infiniti.”
However, experts said there may be other reasons that may have brought about an end to this partnership.
“The partners had been bickering for a long time now and so this exit doesn’t come as a total surprise,” said an industry expert on the conditions of anonymity.
Analysts also believe that armed with the knowledge about the Indian market, Woolworths may consider looking at entering India in the different segment or the front-end at a later stage. Apart from consumer electronics, the company is also present in other categories such asfood & grocery, liquor, petrol and general merchandise. LM
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Woolworths
United Spirits
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