United Spirits Ltd.'s share price rose 3.28% following reports that its parent company Diageo is considering selling part or all of its stake in the Indian Premier League team Royal Challengers Bengaluru.
The British distiller owns RCB through its Indian unit, United Spirits Ltd., and may seek a valuation of up to $2 billion, according to a Bloomberg News report.
Sources familiar with the matter to Bloomberg News that Diageo is in talks with potential advisers to evaluate the best course of action. While no final decision has been made, the company may ultimately decide against selling the team.
The report said that these discussions come at a time when India's health ministry is advocating for a ban on the promotion of tobacco and alcohol brands in the IPL, as well as indirect promotion of other unhealthy products by sports personalities.
Although explicit advertising of tobacco and liquor products is prohibited in India, companies like Diageo have found ways to promote other products, such as soda, using top cricketers.
The potential sale of RCB by Diageo could have significant implications for both the company and the IPL franchise.
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