Regulatory approvals in place for Diageo-USL deal

Liquor baron Vijay Mallya on Tuesday said United Spirits and Diageo Plc have received all regulatory approvals for their `11,166.5 crore deal under which the Indian spirits maker will sell 53.4 per cent to the UK-based firm. "CCI (Competition Commission of India) approval has been received. All regulatory approvals have been received. So that's why it (the deal) is on track," Mallya told reporters here after meeting Finance Minister P Chidambaram. The CCI in an order dated February 26 had approved Diageo's proposed majority stake purchase in Mallya-led United Spirits, saying the deal would not have adverse impact on competition. After seeking clarifications and changes four times, CCI had ruled that the deal would give a boost to entry of premium brands in alcoholic beverage market. Diageo Plc had earlier said it would launch its over `5,441-crore open offer to acquire 26 per cent stake in United Spirits between January 7, 2013 and January 18, 2013 but the delay in getting CCI nod had made it approach market regulator SEBI. While granting its approval to the request, SEBI on its part has said that Diageo will have to pay an interest of 10 per cent per annum for the period of delay to the public shareholders tendering their shares in the open offer. In a letter dated January 31, 2013 SEBI had said the letters of offer needed to be dispatched to public shareholders within seven days and the share tendering period was supposed to begin within next five days. Subsequently, the payment to all shareholders was required to be completed by March 18. However, JM Financial, which has been appointed as manager to offer by Diageo, requested SEBI that the tendering period should be allowed to commence within 12 days of receipt of all applicable statutory approvals. SEBI has accepted the request with a condition of additional interest payment for the delay and Diageo would announce the revised schedule in due course.