LONDON, March 25, 2026, 13:22 GMT
Diageo shares rose as much as 2.4% in early London trading on Wednesday after its Indian unit agreed to sell the cricket franchise Royal Challengers Bengaluru for 166.6 billion rupees ($1.8 billion), a deal that could free up cash for debt reduction. 1
The timing matters. Last month Chief Executive Dave Lewis cut Diageo’s fiscal 2026 sales outlook, halved the half-year dividend and said net debt stood at $21.7 billion as the company grappled with weak U.S. demand and continued softness in China. Reuters reported the group was running above its target debt-to-earnings range. 2
United Spirits said it would sell its 100% stake in Royal Challengers Sports to a consortium of Aditya Birla Group, Times of India Group, Bolt Ventures and Blackstone. The deal covers both the men’s Indian Premier League side and the women’s franchise, and still needs approval from the Board of Control for Cricket in India and the Competition Commission of India. 3
Diageo owns 55.9% of United Spirits, so the parent could end up with just over $1 billion if the Indian board decides to pass the proceeds through as a one-off dividend, Bloomberg reported. Jefferies analysts said that could add close to 1% to Diageo earnings. 1
“The disposal comes as no surprise,” RBC analyst James Edwardes Jones said. UBS said the price looked rich and estimated Diageo’s share of the proceeds at just under 740 million pounds, but added the stock still needs proof that U.S. spirits demand is stabilising. 4
Lewis has already been selling assets and cutting costs. In May last year Diageo unveiled a $500 million savings plan and said it would pursue substantial disposals, and in December it agreed to sell its East African Breweries stake to Asahi for $2.3 billion. 5
The RCB disposal gives investors one more sign that the portfolio review is moving. That matters in a drinks sector still under strain: Reuters reported last month that Pernod Ricard, Remy Cointreau and Campari fell alongside Diageo after its February sales-and-dividend reset, even as Brown-Forman later beat quarterly estimates on steadier demand for whiskey and ready-to-drink beverages. 2
But this is still mostly a debt story, not a demand recovery story. Diageo’s half-year results showed weaker U.S. spirits sales and continued weakness in China, and Bloomberg said the final use of the RCB proceeds will depend on a strategic decision by the United Spirits board. 6
Wednesday’s rise only claws back part of the earlier damage. Diageo shares fell nearly 10% on Feb. 25, their biggest one-day drop since November 2023, after Lewis warned fiscal 2026 sales would fall 2% to 3% on an organic basis — stripping out deal and currency effects. Goodbody analyst Fintan Ryan said then Lewis could only be judged properly once he unveiled his full strategy, which Lewis said he planned to take to the board in the second quarter and lay it out publicly in the third. 2
