Diageo to buy Vijay Mallya's 50% stake in African beer maker UNB

Diageo plans to assume full control of South African beer maker United National Breweries (UNB), by acquiring the remaining 50% stake in the firm from Indian liquor baron Vijay Mallya-controlled Pestello Investments.

Diageo said it has entered into an agreement to acquire the additional 50% interest in UNB, from Pestello, for an initial payment of $22m (£14.8m, €20m) and a potential earn-out payment of up to $14m.

The world's largest spirits maker, in a 2 April statement, said the deal was "conditional on, among other things, consent from the South African competition authority and is expected to complete in this fiscal year.

"Once completed, [the] transaction will give Diageo control of the leading traditional sorghum beer business in South Africa, including the ability to make investment decisions to support the continued growth of United National Breweries' brands in the sorghum beer category.

Diageo is a major producer of beer and wine and owner of popular brands such as Johnnie Walker, Guinness and Smirnoff.

In 2013, the London-headquartered firm reportedly paid $36m for a 50% interest in UNB's traditional sorghum beer business in South Africa.

In 1996, Mallya's UB Group acquired a 30% stake in UNB and later increased it to 100%.