UB Group-Diageo deal likely to be close to $1 bn: Sources

Vijay Mallya may have secured a cash inflow of nearly USD 1 billion. UB Group's deal with Diageo to sell stake in United Spirits may be inked on November 9, reports CNBC-TV18's Kritika Saxena.

Vijay Mallya flew down to London yesterday along with couple of executives in UB Group and United Spirits. There was an important meeting all day long today and sources say that the two companies who had been negotiating over the pricing, management issue have finally reached an agreement. Also read: United Spirits jumps on media report over Diageo talks
As far as the financial contours go, sources say that Diageo will be picking up a majority of stake in United Spirits. It is learnt that this will, of course, trigger an open offer.
Sources add that the deal could be above USD 1 billion and if one includes the open offer price – whatever the average price is reached it could definitely escalate to way above USD 1 billion.
According to sources, Vijay Mallya will continue as the chairman of the company, but Diageo will be taking the management control. So, essentially all the important operational and management details will be decided by the Diageo.
In all ofcourse if you look at the open offer etc coming in, the deal could take around six months to be completed.
What we are picking up from our sources is, that while the agreement has been reached couple of details had to be finalised and hence the term sheet will be signed tomorrow.
Diageo is likely to make an announcement tomorrow afternoon, There hasn't been anything officially released by Diageo yet, but United Spirits is scheduled to launch its results tomorrow. So, definitely tomorrow could be an important day.