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Diageo now waiting for regulator approval in £1.2bn United Spirits deal
The Competition Commission of India (CCI) has approved Diageo’s £1.2 billion deal to buy a 53.4% stake in United Spirits, but the bid is still subject to approval by the market regulator, the Securities and Exchange Board of India (Sebi).
According to CNBC’s Kritika Saxena, Diageo is now looking to rush the approval process and has already responded to Sebi’s final observations on the offer.
Last week the CCI approved Diageo’s bid to take over Vijay Mallya’s United Spirits, ruling that the deal would not have an adverse impact on competition and should help to provide more choice to consumers.
In a statement the CCI said: “The proposed combination is not likely to have an appreciable adverse effect on competition in India”.
The commission added: “Considering the current trend of premiumisation, it is anticipated that the players at various price points in this segment and as well as in other segments may introduce new and innovative premium brands and products, thereby providing more choice to the consumers.”
The deal would see Diageo acquire a 53.4% stake in United Spirits over the next five years and shares in United Spirits rose by 8% on Friday on the back of the CCI’s approval.
Following delays in the initial timetable for the deal Diageo must now wait for Sebi’s final approval but sources in India indicate this step is more or less a formality and expect the deal to now move ahead rapidly.