Diageo mulls options for stake sale in RCB after IPL win
Following its landmark IPL win, Diageo is reportedly exploring options to sell its stake in Royal Challengers Bangalore. The franchise is currently valued around $2 billion.
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The global spirits conglomerate Diageo is exploring stake sale options in Indian Premier League (IPL) outfit Royal Challengers Bengaluru (RCB), as per a report by Bloomberg. The company, which holds the team through its Indian subsidiary United Spirits Ltd, is in early discussions with potential advisers about the possibilities to sell a part or all of the franchise, the report claims. Read more: Business of belief: What RCB’s IPL win means for sports branding
At present, Diageo owns the team through its Indian unit United Spirits, and might seek a valuation of as much as $2 billion for RCB, according to the report. Diageo and United Spirits have not issued any public statements regarding the potential divestment.
Initially, RCB was purchased by Vijay Mallya in 2008 — under the banner of his liquor empire, United Spirits Limited (USL). After Mallya’s exit in 2016 amid legal and financial troubles, Diageo assumed control via its majority stake in USL. While the day-to-day management remains with USL, ultimate corporate control now rests with Diageo.
The news of the potential stake sell comes a week after RCB lifted the IPL trophy for the first time in 18 years and the franchise's value continues to soar. The move also comes at a time when Diageo is facing mounting regulatory pressure from the Union Health Ministry to curb indirect advertising of alcohol during major sporting events like the IPL.
