Diageo recently announced that it has entered into an agreement to acquire a 50% interest in the company which owns United National Breweries' traditional sorghum beer business in South Africa. The remaining 50% will be held by a company affiliated to Mallya. Diageo will acquire its 50% interest for US$36M, subject to customary adjustments. The transaction is conditional on (among other things) consent from the S African competition authority and is expected to be completed during the first half of 2013. The move by Diageo is subsequent to the MoU which was announced last November under which they would form a 50:50 joint venture, which would own United National Breweries' traditional sorghum beer business in South Africa. This transaction was part of the multi-layered deal which Vijay Mallya struck with Diageo November 2012. United National Breweries is among the leading manufacturers of traditional African Sorghum Beer (Umqombothi), which is the core business of UNB. It produces and distributes Umqombothi from six breweries and numerous distribution depots strategically situated throughout South Africa.
