Diageo mulls stake sale in RCB, to seek USD 2 billion valuation.(Source: X)
In a significant development following Royal Challengers Bengaluru’s (RCB) maiden Indian Premier League (IPL) title win, British distilling giant Diageo Plc is reportedly exploring the possibility of selling part or all of its stake in the franchise.
As per a Bloomberg report, Diageo has initiated discussions with financial advisers to evaluate potential options, including a partial or full divestment of RCB. The franchise, held through Diageo’s Indian arm, United Spirits Ltd., could fetch a valuation of up to USD 2 billion. While no final decision has been taken, the exploration of a sale comes after the growing financial attraction of IPL franchises.
Founded in 2008 as one of the original IPL franchises, Royal Challengers Bengaluru was initially owned by business tycoon Vijay Mallya. Following Mallya’s financial downfall, Diageo took control of the team as part of its acquisition of his spirits empire.
After years of underachievement and near misses, RCB finally clinched their first IPL title this year, breaking an 18-year drought, beating the Punjab Kings at the Narendra Modi Stadium in a blockbuster final. The recent title win has increased the brand value of the franchise.
With Virat Kohli, one of the most followed athletes globally, continuing to be the face of the team, RCB are a hot asset in the sports investment market. The decision by Diageo comes after India’s Union Health Ministry strengthened rules around advertising, especially those linked to alcohol and tobacco, during major sporting events like the IPL. Although alcohol advertising is banned in India, companies like Diageo have historically promoted soda and non-alcoholic variants using top cricketers under surrogate advertising.
However, with the Health Ministry pushing for a complete ban on such indirect promotions, Diageo’s ability to leverage RCB for brand visibility may be significantly impacted. This has likely contributed to the company reconsidering the future of its IPL association. Furthermore, Diageo is suffering with challenges in its core markets, especially the United States, where slowing consumer demand and tariffs have dented premium liquor sales.
Disclaimer: This latest news is based on the author’s understanding, analysis, and instinct. As you review this information, consider the points mentioned and form your own conclusions.
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