In a joint statement after trading hours on Friday, UK-based Diageo said it has entered into an agreement with United Breweries and United Spirits to acquire a 27.4% stake in USL. Diageo would also acquire a 19.3% stake in USL at Rs. 1,440 per share from the UBHL group, the USL Benefit Trust, Palmer Investment Group and UB Sports Management and SWEW Benefit Company.
Industry estimates that the profits of United Spirits could go up following the acquisition.
Analysts, including from Morgan Stanley and CLSA, upgraded the stock after the deal, saying the $2.1 billion deal would substantially benefit USL.
The company's stock had hit a 52-week low in January this year, when it was seen as going through a rough patch. The stock of the company has jumped by 308% since then.
USL stock has risen by 85% in the last one month on news that Diageo was eyeing a stake in the company.
By contrast, the stock price of Unites Breweries were down by Rs. 35.5 or 4.48% on Monday to close at Rs. 756.6.