(MENAFN - AFP) British alcoholic drinks giant Diageo announced a deal on Friday for control of Indian whisky maker United Spirits worth 1.285 billion to tap into India's growing number of middle class consumers.
The London-listed firm, seeking emerging markets expansion, said it would buy a 27.4-percent stake in United Spirits Limited (USL) for 660 million, triggering a public offer that would see its holding eventually climb to 53.4 percent.
Diageo said in a statement that it would launch a tender offer to acquire 26 percent of USL at 1,440 rupees a share.
"On completion of the share purchases... and in the event that the tender offer were fully subscribed, Diageo will hold 53.4 percent of the enlarged USL share capital at an aggregate cost of 111.665 billion rupees (1.285 billion, 2.051 billion, 1.612 billion euros)."
Following completion of the deals, Vijay Mallya will continue in his current role as chairman of both USL and UBHL. Diageo added that it would fund the acquisition through debt and existing cash resources.
"I am delighted at the opportunity Diageo has to be part of India's large and growing local spirits market," added Diageo chief executive Paul Walsh in the statement.
"As a result of the agreements we are announcing today we will be well positioned to take the growth opportunities presented by a spirits market where growth is driven by the increasing number of middle class consumers."
Walsh added that a "combination of USL's strong business with the capabilities which Diageo brings as the world's leading premium drinks company will ensure that USL continues to lead the industry in India."
Diageo's drinks portfolio includes Baileys liqueur, Captain Morgan rum, Guinness stout, Johnnie Walker whisky, Smirnoff vodka and Tanqueray gin.
The British brewing giant is further expanding into emerging markets following its recent takeovers of Turkish spirits group Mey Icki and Ethiopian brewer Meta Abo.<