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Diageo revives talks to acquire stake in India's United Spirits

  • Diageo revived talks on Tuesday to purchase a stake in Indian billionaire Vijay Mallya's United Spirits.

    In recent years, Diageo has been seeking to boost its presence in India, the world’s biggest whiskey market.

    The two sides held talks in 2008 that collapsed but according to sources, Mallya is more open to offers this time around.

    The tycoon has been struggling over the past year to raise funds for his ailing Kingfisher Airlines, spurring speculation that he may offload stakes in United Spirits or United Breweries, producer of his flagship Kingfisher beer.

    Diageo, the world's biggest spirits group and the maker of Johnnie Walker whisky and Smirnoff vodka, is to initially buy a 15 percent stake from Mallya's UB Group, which owns about 28 percent of United Spirits, along with a further 10 percent from other shareholders.

    The move would remove Mallya as the largest shareholder in United Spirits, which had a total gross debt of $1.52 billion at the end of March.

    Diageo may offer $22 to $24 a share, valuing the 25 percent stake at around $793 million.