You are here: Home » Companies » News
Business Standard

Diageo will have to wait to integrate USL in totality

Whyte & Mackay to be kept out of integration until Officer of Fair Trade in UK takes a call

Raghuvir Badrinath  |  Bangalore 

Diageo, which recently acquired a 25 per cent stake, as well as management control, in United Spirits Limited (USL), would have to wait for some time to entirely integrate the target into its books. The primary hurdle to the exercise is USL’s Scotland-based wholly-owned subsidiary Whyte & Mackay, which USL acquired in 2007 for $1.2 billion.

The Office of Fair Trading, UK, is studying whether the fact that Diageo took control of USL has resulted, or might be expected to result, in a substantial reduction of competition for goods or services within any market in the UK.

As a result, Diageo cannot integrate the numbers of Whyte & Mackay until the Office of Fair Trading takes a decision on the matter.

A Diageo spokesperson said the company couldn’t comment on the integration of Whyte & Mackay, as the Office of Fair Trading, UK, was looking into the matter.

Whyte & Mackay accounts for 17 per cent of USL’s Rs 10,000-crore annual sales.

Earlier, Diageo had said if Whyte & Mackay was a hurdle, the company wouldn’t be averse to divesting that asset. USL had also considered divesting 49 per cent in Whyte & Mackay to meet Office of Fair Trading norms.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, August 13 2013. 00:48 IST