The consideration will be for Rs 1440 per share and the total consideration would be Rs 57,254 million (approximately £660 million).
However, Dr Vijay Mallya will continue in his current role as Chairman of USL, and UBHL and Dr Mallya will work with Diageo to build the USL business as the current consumer trends for premiumisation accelerate in India.
An agreement has been made to acquire a 19.3% interest in the current share capital of USL at a price of Rs 1440 per share from the UBHL group, the USL Benefit Trust, Palmer Investment Group Limited and UB Sports Management (two subsidiaries of USL) and SWEW Benefit Company (a company established for the benefit of certain USL employees).
Following this disposal, the UBHL group would continue to have a shareholding in USL amounting to 14.9% of current share capital.
The shareholders of USL will be asked to approve the preferential allotment to Diageo at a price of INR 1440 per share of new shares amounting to 10% of the post-issue enlarged share capital of USL.
On completion of the share purchases as described above and in the event that the tender offer were fully subscribed, Diageo will hold 53.4% of the enlarged USL share capital at an aggregate cost of Rs 111,665 million (approximately £1,285 million).
Diageo and Dr Mallya have entered into a memorandum of understanding under which they will form a 50:50 joint venture which will own United National Breweries' traditional sorghum beer business in South Africa.
The other company shares of Mallya's UB Group ended the day higher, with United Spirits up 1.22%, debt-laden Kingfisher Airlines up 4.97 %, United Breweries rose 0.39% on BSE.