DIAGEO took a major step towards acquiring a 53.4% stake in United Spirits, part of the Indian-based business behind Glasgow distiller Whyte & Mackay, after the deal won the approval of the Indian competition regulator.
The Competition Commission of Indian (CCI) had been weighing up a verdict since Diageo lodged its $2.1 billion offer for the share in United, owned by UB Group, led by Vijay Mallya, pictured, in November.
The ruling looks set to give Diageo, the giant behind Johnnie Walker, Guinness and Bell's, access to India's burgeoning spirits market, which sold 433 million nine-litre cases in 2011.
It comes after chief executive Paul Walsh said it continued to reach middle class consumers in "faster growing" markets when it reported results for the six months to December 31, in January.
The Commission ruled that "even if the brands of USL and Diageo were considered as close competitors, it is observed that there are multiple brands of other players who are present and effectively competing with the brands of USL and Diageo in those segments".
It said there is little overlap between Diageo and United's products in each spirits segment, and that combined volume of whisky sold by a combination of two companies in India would be "minuscule in comparison to the overall volume of the whisky segment".
The Commission added that the combination of the two company's brands may even broaden consumer choice as "the proposed combination may bring new products and more variants of the existing brands at different price points".
Diageo confirmed it had received CCI clearance.
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