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HindustanTimes Sat,19 Apr 2014

CCI clears Diageo-USL deal, shares surge

PTI  New Delhi, March 01, 2013
First Published: 20:46 IST(1/3/2013) | Last Updated: 20:47 IST(1/3/2013)

After seeking clarifications and changes four times in a proposed acquisition of majority stake by UK-based Diageo in UB group's United Spirits Ltd, fair trade regulator Competition Commission of India (CCI) has ruled that the deal would give a boost to entry of premium brands in alcoholic beverage market.

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"Diageo's acquisition of USL may give a boost to the premiumisation strategy... The combination may increase and improve consumer choice," CCI has said.

United Spirits shares rose 2.02% on the BSE and closed at Rs. 1,877 post the announcement.

CCI, in an order dated February 26, has approved Diageo Plc's proposed majority stake purchase in Vijay Mallya-led United Spirits, saying the deal would not have adverse impact on competition.

The proposed transaction worth about $2 billion would provide much needed cash for Mallya's UB group, whose aviation venture Kingfisher Airlines is facing turbulent times.

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