Vijay Mallya 3.0: A WOW Dream for India’s 160 mln odd connoisseurs – Deal Insight

United Breweries Group

The Six year old dream to snip and whip the USL Indian brand portfolio with Diageo has borne fruition with INR 33.3 B for USL and INR 24 B for UB Holdings while United Breweries did not seem to be mentioned in the deal announcements and presser at a good valuation for UB group at INR 1440 per share of wwhich 10% will be thru warrants and the first 19% will be from group companies . Vijay Mallya will be holding a residual 15% stake and continue to be a chairman at USL. Diageo will hold 53-54% in USL  United Breeries carries a 38% stake of Heineken that as already final in 2007/8

Diageo spirits known to India include Smirnoff, Johnie Walker and Baileys. Other global hits known to connoisseurs include Jose Cuervo (Tequila), Guinness and Captain Morgan. As the press con just concluded indicates, African and EE&ME markets could welcome Indian whiskies as well

Indian premium IMFL market will be evenly split and grow from the current $160 mln odd to even 10 times with global brands bidding each other directly as has turned for coke in the NA Beverages markets. In the latest quarter Diageo has grown evenly in African and Latin American markets in double digits and a faster 30% clip in European markets like Turkey. Vodka has been on the wane in India this quarter but Emerging markets make 40% of the Diageo portfolio. Diageo investors have not taken kindly to the acquisition announcement

Johnie Walker grew as much as 15% in FY 2012 in the first six months. India is expected to grow 4-5 times in the next 5 years to more than 600 mln coonsumers as per Capita consumption in India remains very low assuring the current CAGR of 15% to continue without a break

According to the chief, KFA will not receive any funds from this deal. Diageop will be further making an open offer for 26%




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Deutsch: Logo (Photo credit: Wikipedia)



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