Diageo, United Spirits officials to meet this week
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Top officials of Diageo and United Spirits, including its chairman Vijay Mallya, are likely to meet this week to discuss regulatory and other issues related to their proposed USD 2 billion deal.
The transaction -- that would see global liquor major Diageo acquiring majority stake in United Spirits Ltd (USL) – is yet to receive green signal from fair trade regulator CCI, which is believed to have concerns about possible impact of competition in the market once the deal goes through.
Sources said that top officials of Diageo and USL are likely to meet this week in Goa to discuss various issues related to the proposed deal. UB Group Chairman Vijay Mallya is also expected to be present at the meeting.
Officials are expected to deliberate on issues related to regulatory compliance, including additional costs, among others, they added.
Depending on the outcome, there could be more meetings in the future, sources said. One of the world's largest spirit companies, USL is part of Mallya-led UB Group, whose aviation venture Kingfisher Airlines is going through turbulent times.
When asked about status of various regulatory approvals and whether the company has asked USL to take care of expenses related to regulations, Diageo said, "We have received Sebi's comments and we are considering them".
The company did not provide further details while similar queries sent to USL did not elicit any response.
On January 31, capital market regulator Sebi had cleared an open offer by Diageo for purchase of 26 per cent stake in USL, which is part of the USD 2 billion deal.
Sources said Competition Commission would take some more time before deciding on the Diageo-USL transaction and it has also sought more information from Diageo. A final decision by the Commission is likely in March, they added.
"Regarding the deal, the Commission is basically looking at Section 20 (4) of the Competition Act which relates to the impact of a combination to the competition in that relevant market," sources said.
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