New Delhi World's largest alcohol player Diageo's protracted efforts for a pie in India's liquor king Vijay Mallya's group firm failed on Tuesday but neither side gave reasons for the abrupt ending.
The British firm was to buy 15 per cent stake in Mallya's United Spirits Ltd (USL) and the two firms were in talks since early this year for the sale of USL's treasury stock -- created by amalgamation and de-mergers and not traded on exchanges.
The deal would have added global brands like Johnnie Walker Black Label and Smirnoff to the USL stable, which already has McDowell's No.1, Romanov, Royal Challenge and Black Dog in portfolio.
A top USL official confirmed the development but did not want to be identified.
Meanwhile, when contacted, the company spokesperson said that he would need to check the details and get back.
UB Group was planning to retire a portion of its debts through the stake sale to Diageo, which eventually was keen on picking up more than 15 per cent in India's largest spirits maker.
In May 2007, UB had raised a debt of 595 million pounds for buying Scotch major Whyte & Mackay.
The UB Group, however, was not interested in selling more than 15 per cent in USL because under the Securities and Exchange Board of India rules the move would have triggered an open offer for another 20 per cent share, which would have helped Diageo match promoter's shareholding in the company.
Until recently, the UB Group had maintained that the negotiations between the two companies were on, although Mallya had said that the delay in the finalisation of the deal was on account of anti-trust and monopoly issues.
The UB Group had recently sold 10.27 per cent stake in USL to a private equity firm for about Rs 950 crore to retire a part of debt.
In 2005, Vijay Mallya-led United Breweries acquired Shaw Wallace & Company, following which it was merged with the group's flagship company USL last year.
As a result of this merger, about 17 per cent treasury stock was created.
The group has been looking at raising up to $300 million through stake sale in USL.
"We are looking to raise another $250-300 million through the sale of stake in United Spirits Ltd ... It could be a mix of treasury stock as well as other shares," UB Group Chief Financial Officer Ravi Nedungadi had told PTI.
United Spirits has over 150 products in its portfolio.
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