Has the Motive for M&A changed with the Time ?

The world’s largest spirits company Diageo Plc decided to hike its stake in United Spirits (USL), a company it acquired in 2012 and blogtry to take its stake to 55%.

Diageo has launched an open offer on Tuesday morning to acquire an additional 26% in the company. Currently Diageo holds 29% stake in the company via one of its international arms Relay BV and has been trying to gradually acquire more shares in Vijay Mallya’s flagship distillery from the open market.

The motive of the offer, if successful, aimed at better strategic control, will give Diageo a higher direct ownership in the business. Tender offer in the Indian market is a rare phenomenon comparing to the global markets. 

When we just dig in to the history the Major previous global waves of Mergers and acquisitions been driven by

Reasons Time frame
Horizontal Integration 1880’s to 1990’s
Vertical integration During 20’s
Conglomerate wave During 60’s
Value Moment During 80’s
Tech- globalisation During 90’s


Disappointingly, there’s no introspective mention of value destruction to be seen, but we do get price defense as the main justification for M&A activity: Now the New wave for M&A are driven by these major reasons

  • Need to cut Costs
  • Find Alternatives routes for growth
  • Defend Prices

So will the USL be delisted after the open offer from the Indian bourse – well I don’t know , I would prefer to take a sip of western whisky and enjoy the proceedings .





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