BRITISH giant Diageo is exploring the sale of its controlling stake in India's Royal Challengers Bengaluru cricket team, potentially valuing the newly-crowned champions at up to £1.6 billion ($2bn).
The maker of Guinness and Johnnie Walker whisky is weighing its options for the Indian Premier League franchise, including selling part or all of its ownership through United Spirits, its Indian subsidiary where it holds a 55.9 per cent controlling interest, reported the Bloomberg.
Reports said that the London-based company has been in talks with potential advisers about various possibilities for the team, though no final decision has been made and Diageo may choose to keep the franchise.
United Spirits quickly dismissed the speculation in a stock exchange filing, calling reports of a potential sale "speculative in nature" and adding it was "not pursuing any such discussions". Diageo declined to comment when approached.
The timing of these discussions coincides with mounting pressure from India's health ministry, which is pushing to ban all tobacco and alcohol advertising from the IPL. Current Indian law already prohibits direct promotion of these products, forcing companies like Diageo to advertise alternative products using cricket stars instead.
The potential sale comes just weeks after Royal Challengers Bengaluru claimed their first-ever IPL title, with cricket superstar Virat Kohli leading the team to victory, the Bloomberg report added.
However, the triumph was overshadowed by tragedy when a deadly stampede during the team's victory celebrations in Bengaluru killed at least 11 people, creating reputational challenges for the franchise owners.
Diageo's connection to the team traces back to troubled aviation entrepreneur Vijay Mallya, once known as "India's Richard Branson" and "the king of good times".
Mallya was forced to sell his spirits empire to Diageo for £60 million thirteen years ago to raise funds for his failing Kingfisher Airlines, which eventually collapsed in 2012 owing roughly £1bn to banks.
The potential disposal fits with Diageo's broader strategy to streamline its global portfolio. Finance chief Nik Jhangiani recently outlined plans for "substantial" disposals beyond the "usual smaller brand disposals" as part of a £400m cost-cutting programme.
"It's clearly going to be above and beyond the usual smaller brand disposals you've seen over the last three years," Jhangiani said during the company's third-quarter update.
The company has already begun reducing its exposure in various markets, selling its Nigerian and Ghanaian Guinness operations last year and swapping Cîroc vodka rights for basketball star LeBron James-backed tequila brand Lobos 1707 in April.
Any sale would come at a time when IPL team valuations are soaring, making franchises among the most coveted assets in global sport. The league has grown into a commercial powerhouse rivalling the NFL and Premier League, with its short three-hour matches attracting hundreds of millions of viewers worldwide.
Diageo aims to generate around £2.4bn in free cash flow from 2026, supported by its cost-saving programme, to fund further investments and improve its financial position amid challenging market conditions in key regions like the US.
