Diageo has poured cold water on reports it is planning to offload its Indian cricket franchise Royal Challengers Bengaluru.
In a statement to the National Stock Exchange of India, Diageo’s Indian arm United Spirits Limited said media reports it was exploring options to sell a part or all of its stake in the Indian Premier League franchise were “speculative in nature”.
The unit was “not pursuing any such discussions”, it added.
The statement contradicts an earlier report by Bloomberg, which said Diageo had begun early talks with advisors and was open to various options including a full sale of RCB.
A sale would help Diageo simplify its global operations and could fetch as much as $2bn, the report said, citing people familiar with the matter.
RCB beat Punjab Kings earlier this year to record its first title since the IPL was formed in 2008. The team takes its name from United Spirits’ Royal Challenge Indian whisky.
“In a world where companies are focusing on what they do best and offloading non-core stuff, Diageo may not have to think too hard about [selling] its sports assets, although [RCB] has been a helpful route by which to promote its products,” said Russ Mould, investment director at AJ Bell.
Read more: Which brands could Diageo sell as part of ‘substantial’ portfolio shake-up?
It comes after Diageo unveiled plans to boost free cashflow and lift margins via a new operating model dubbed ‘Accelerate’ last month.
The London-listed group has outlined a target to “sustainably deliver” around $3bn free cashflow per year from fiscal 2026, supported by a $500m (£370m) cost savings programme, amid sluggish demand for spirits globally.
And CFO Nik Jhangiani revealed Accelerate could result in “substantial changes” to its portfolio that went above and beyond smaller brand disposals seen in recent years.
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