Diageo Plc is considering a partial or full stake sale in Royal Challengers Bengaluru (RCB), potentially valuing the IPL franchise at $2 billion. The move could bring a new RCB owner amid Diageo’s global business strategy shift.
Bengaluru: Diageo Plc, the UK-based global spirits giant, is reportedly exploring the possibility of selling a part, or possibly all, of its stake in the Royal Challengers Bengaluru (RCB), the Indian Premier League (IPL) cricket franchise that recently clinched its maiden IPL title.
Diageo evaluates stake sale with advisors
According to individuals familiar with the matter, Diageo has initiated consultations with potential advisors to evaluate strategic options, including a partial or full divestment of RCB. The franchise could be valued at around $2 billion, reflecting the IPL’s growing market appeal and commercial value.
Historic franchise with star power
RCB is one of the original IPL franchises and features Indian cricket icon Virat Kohli among its key players. Initially owned by businessman Vijay Mallya under United Breweries Group, the team came under Diageo’s control after the acquisition of Mallya’s spirits business. Mallya’s now-defunct Kingfisher Airlines ceased operations in 2012.
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Stock surge follows sale reports
Following news of a potential stake sale, shares of Diageo’s Indian arm, United Spirits Ltd., surged as much as 3.3% in Mumbai trading, reaching their highest point in five months.
The potential move comes amid growing regulatory scrutiny in India, where the health ministry is pushing to curb the indirect promotion of tobacco and alcohol products in sports. This includes restricting sports stars from endorsing unhealthy products. Although direct alcohol ads are banned, companies like Diageo have promoted soda products using cricket personalities as brand ambassadors.
RCB sale could reset IPL franchise valuations
With the IPL evolving into a multibillion-dollar sports and entertainment phenomenon, comparable to the NFL and English Premier League in commercial reach, the sale of an RCB stake could set a new benchmark for future team valuations. The league’s short-format games consistently draw massive viewership across India and abroad.
Diageo recalibrates global strategy
Facing economic pressures in key markets like the US, due to tariffs and weakening demand for premium spirits, Diageo may view the stake sale as a way to unlock capital. This would allow the company to refocus on its core business and streamline its global asset portfolio.
While discussions are ongoing, sources emphasised that Diageo has yet to make a final decision and could ultimately retain full ownership of the RCB franchise.
