In an interesting turn of events world's largest spirit manufacturer of liquor, Diageo has bought  53.4% stake in Dr. Vijay Mallya's Unitied Spirits (USL) for USD 2 billion which means he will now lose the controlling stake.

However, Dr. Mallya is to remain as the chairman of the group. The agreement comes after months of on & off negotiations. Diageo, the world's biggest spirits group and maker of brands including Johnnie Walker whisky, Guinness beer and Smirnoff vodka, has long awaited an expanded presence in India. The deal would ramp up Diageo's presence in the world's largest whisky market, while Vijay Mallya will gain much-needed cash to reduce company debt. It could also free up funds to revive his grounded Kingfisher Airlines, say reports.

Shares in Mallya-controlled companies rose after the news of the deal spread, with Kingfisher gaining 4.7 percent. United Spirit was up 1.5 percent and United Breweries Holdings Ltd was 2.6 percent higher.The purchase would be the biggest inbound Indian M&A deal since British oil firm Cairn Energy Plc's sold a majority stake in its Indian business to Vedanta Resources Plc last year.

AW-Jyotishman