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Diageo eyes presence in India's whisky market

Diageo is looking to buy a 15 percent stake from Vijay Mallya's United Breweries Group

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Diageo is looking to expand its presence in India by renewing talks to buy a stake in United Spirits, a move that would significantly boost its presence in the world’s largest whisky market.

The drinks giant entered into talks in the past with Indian billionaire Vijay Mallya to buy a stake in Mallya’s United Spirits Ltd but talks collapsed. This time sources say Diageo is more hopeful of a positive outcome.

Diageo, whose brands include Johnnie Walker whisky and Smirnoff vodka, is looking initially to buy a 15 percent stake from Mallya's United Breweries Group, which owns about 28 percent of United Spirits, and a further 10 percent from other shareholders, one banker familiar with the matter told Reuters on Tuesday.

That would dislodge Mallya as the largest shareholder in United Spirits.

"There is no certainty that these discussions will lead to a transaction," United Spirits, the world's No.1 spirits maker by volume, said in a statement to India's stock exchanges.

Mallya declined to elaborate to reporters following United Spirits' annual shareholders meeting on Tuesday in Bangalore.

If Diageo took control of United Spirits it would need to unload the Indian company's Whyte & Mackay scotch whisky business to avoid anti-trust problems. Diageo is the world's biggest scotch whisky maker with around a third of the market.

Analysts see a deal as positive for Diageo as India is the world's largest whisky market and Diageo is the world's No.1 Scotch whisky maker.



Diageo eyes presence in India's whisky market
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