London, March 26, 2026, 16:49 GMT
Diageo shares closed 1.16% higher at 1,393 pence on Thursday after the drinks group said its Indian unit, United Spirits, had agreed to sell Royal Challengers Sports, owner of the Royal Challengers Bengaluru cricket franchises, for 166.6 billion rupees ($1.78 billion). 1
The move matters because investors have been pressing new chief executive Dave Lewis to raise cash and steady the balance sheet after he halved Diageo’s interim dividend last month and cut fiscal 2026 organic sales guidance to a 2% to 3% decline. Organic sales strip out currency swings and the impact of deals. Net debt stood at $21.7 billion at the end of December, company results showed. 2
United Spirits said the transaction covers both the men’s Indian Premier League team and the women’s franchise, and follows a strategic review of an asset Diageo had already labelled non-core to its alcohol business. The sale is still subject to closing conditions and approvals, including from India’s cricket board and competition regulator. 3
Lewis has been blunt about the need to free up room to manoeuvre. In February, he said Diageo needed “more financial flexibility” and put “customer, customer, customer” at the centre of the turnaround as he reworks the group’s category strategy and operating model. 4
That urgency reflects the state of the underlying business. Diageo said first-half organic net sales fell 2.8%, dragged down by weaker U.S. spirits demand and continued weakness in Chinese white spirits, or baijiu, China’s traditional grain liquor. Operating profit before exceptional items also fell 2.8%. 4
Analyst reaction has stayed guarded. Dan Coatsworth, head of markets at AJ Bell, said the “repair job is massive,” while Aarin Chiekrie, equity analyst at Hargreaves Lansdown, wrote that “some caution would be wise” until demand improves. 2
Thursday’s rise only narrows the damage. Even after the gain, Diageo’s shares closed far below their 52-week high of 2,214 pence and only modestly above the 52-week low of 1,351 pence, Hargreaves Lansdown data showed. 1
The pressure is not confined to Diageo. Pernod Ricard reported weaker sales and profits across its priority markets in February as its U.S. and China businesses struggled, while Jack Daniel’s maker Brown-Forman beat quarterly estimates in early March on steady demand for whiskey and ready-to-drink products. 5
For now, disposals are giving investors something concrete to hold on to. But the RCB sale still needs approval, and Lewis has said he will present an updated strategy to the board in the second quarter and share it publicly in the third, with weak U.S. demand, tariff costs and execution risk still hanging over the group. 6
