It's finally gone through – Diageo has acquired a controlling 54.7% stake in India's leading spirits company, United Spirits (USL). It's cost them a total of £1.86billion, an amount partially reduced by lowering United Spirits' debts with the enforced sale of Whye & Mackay.
Before interest or deductions, the amount Diageo has paid is nearly 39 times USL's annual revenue. However, this large capital outlay is expected to pay off by 2020, as well as aid in Diageo's plan to diversify into emerging markets. The purchase gives Diageo more than a third of the Indian spirits market, and chief executive Ivan Menezes told investors recently that he predicts that India alone will eventually account for 10% of the company's turnover.
Diageo is currently working on sorting out USL's books with a view to bringing them into line with international standards by the start of their financial year on 1 July.