Fair trade regulator Competition Commission of India (CCI) today approved the Rs. 11,166 crore takeover of United Spirits by UK-based liquor major Diageo.
CCI, whose approval is necessary for all major merger and acquisition deals involving Indian companies, is believed to have had reservations earlier on certain clauses of the deal, which were later addressed by the two companies.
In November last year, UK-based Diageo announced a deal to acquire up to a 53.4 per cent stake in United Spirits.
As part of the deal, Diageo will acquire a 27.4 per cent stake for Rs. 5,725.4 crore through a combination of share purchase from existing promoters and preferential allotment of shares. In addition, it will purchase further a 26 per cent stake for Rs. 5,441.07 crore through an open offer.
The proposed open offer for an additional 26 per cent stake in USL entails the purchase of about 3.8 crore shares at a price of Rs. 1,440 per share, totalling Rs. 5,441 crore, by Relay BV, a wholly-owned subsidiary of Diageo.
United Spirits, the country's largest spirits company, is part of Vijay Mallya-led UB Group, whose aviation venture Kingfisher Airlines has been going through turbulent times.