Royal Challengers Bengaluru to be sold? Diageo considers major move
What's the story
Diageo Plc, the British distiller that owns the Indian Premier League (IPL) cricket franchise Royal Challengers Bengaluru (RCB), is considering a possible stake sale, as per Bloomberg.
The development comes days after RCB's first-ever IPL victory and amid India's health ministry's push to ban alcohol brand promotions in sports.
The team was previously owned by Vijay Mallya before Diageo acquired his spirits business through its Indian subsidiary United Spirits Ltd.
Market reaction
Diageo seeks $2 billion valuation for RCB
Reports of Diageo's potential stake sale have led to a surge in United Spirits's shares, which rose by as much as 3.3% in Mumbai trading on Tuesday morning.
The company is exploring options with advisers and may seek a valuation of up to $2 billion for the franchise.
However, no final decision has been made yet and they could also choose to retain ownership.
Team history
How Vijay Mallya lost control of RCB
RCB, one of the original IPL franchises, was first owned by beer tycoon Vijay Mallya.
After his Kingfisher Airlines Ltd. folded in 2012 due to unpaid debts, Diageo took over RCB after acquiring Mallya's spirits business.
The team has been a major player in the league with cricketing superstar Virat Kohli as its star player since inception.
Market growth
IPL teams' skyrocketing valuations and Diageo's challenges in US market
The skyrocketing valuations of IPL teams have made them highly sought-after assets in the sports world.
A potential sale by Diageo could set a new benchmark for future deals in this fast-growing league.
However, Diageo is facing headwinds in its largest market, the US, where tariffs and slowing consumer spending are hurting premium liquor sales.