Diageo (NYSE: DEO ) can add another company to its portfolio of international assets. The company said it has gained control of United Spirits, an India-based whiskey distiller. This was effected by the purchase of a nearly 15% stake in the firm from a company controlled by Indian tycoon Vijay Mallya for 31.3 billion rupees ($520 million). That gives Diageo a direct stake of just more than 25% in United Assets. In combination with existing voting and governance arrangements with Mallya, it provides Diageo control of the company.
In the press release announcing the news, the liquor multinational quoted CEO Ivan Menezes waxing enthusiastic about its position in the country. "India will become one of Diageo's largest markets and with its increasing number of middle class consumers looking for premium and prestige local spirits brands as income levels rise it will also become a major contributor to our growth ambitions," he said.
Diageo said United Spirits' results will be consolidated into its finances starting at the beginning of next year.