United Spirits, the Indian subdivision of alcoholic beverage producer Diageo, has secured Board of Director’s approval for its merger with its majority-owned subsidiary Pioneer Distilleries.

Under the proposal, Pioneer Distilleries’ non-promoter shareholders will be entitled to receive ten equity shares of United Spirits for every 47 equity shares of Pioneer Distilleries.

Diageo India executive director and chief financial officer Sanjeev Churiwala said: “The proposed merger is part of our strategy to consolidate the India business and further simplify the operating structure which would result in enabling business synergies and efficiencies.

“We believe this decision will maximise shareholder value for both the companies.”

Upon completion of the merger, United Spirits’ issued capital will expand by around 0.1% and Diageo’s revised holding in the company will be 55.18%.

The company noted that the proposed merger is subject to the receipt of requisite approvals from the statutory authorities including Securities Exchange and Board of India (SEBI), National Stock Exchange of India, BSE and the National Company Law Tribunal.

The merger also requires consent from the respective shareholders and creditors of United Spirits and Pioneer Distilleries.

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Diageo India manufactures, sells and distributes a range of premium alcohol beverage brands including Johnnie Walker, Black Dog, Black & White, VAT 69, Smirnoff and Captain Morgan.

The company has 50 manufacturing facilities across states and union territories in the country.

Last month, Diageo introduced artificial intelligence (AI) tool, What’s Your Whisky, to help consumers identify whisky based on their flavour preferences and matches.