Diageo Eyes $2 Billion Windfall from Royal Challengers Bengaluru Sale

Friday, March 20, 2026

Diageo, the London-listed spirits giant, is poised to potentially receive a $2 billion windfall from the sale of its Indian Premier League (IPL) cricket team, Royal Challengers Bengaluru (RCB). This divestment is part of a broader strategy by Diageo to strengthen its balance sheet and focus on its core business, as the company navigates a challenging period marked by declining premium spirits demand and increased costs.

A Tough Period for Diageo

Recent months have been difficult for Diageo, with its share price experiencing a decline amid market headwinds. The company’s interim chief executive, Nik Jhangiani, would welcome progress on asset sales to highlight at the upcoming annual general meeting. The potential sale of RCB represents a significant opportunity to address these financial pressures.

The RCB Acquisition and Current Value

Diageo initially acquired a controlling stake in United Spirits, the Indian drinks business, in 2016, which included ownership of the Royal Challengers Bengaluru franchise. RCB’s value has significantly increased, particularly after winning the prestigious IPL crown earlier this year, defeating Punjab Kings in the final. This victory has heightened interest in acquiring the team.

Sale Process and Potential Buyers

The sale process, overseen by the Raine Group, is nearing completion with a deadline of March 31st. Two primary contenders have emerged:

• A consortium led by Ranjan Pai of Manipal Hospitals, alongside US private equity firm Kohlberg Kravis Roberts & Co (KKR), and Singapore-based investment group Temasek.
• Swedish private equity firm EQT, potentially in collaboration with Premji Invest.

Manchester United owner Avram Glazer had initially expressed interest but has since withdrawn from the bidding process. Serum Institute CEO Adar Poonawalla also considered a bid but ultimately did not proceed.

Strategic Rationale for the Sale

Diageo India’s MD & CEO, Praveen Someshwar, has described RCB as an “exciting business, but…non-core for Diageo.” The sale aligns with Diageo’s strategy to divest non-core assets and streamline its operations. The Indian government’s plans to further tighten restrictions on alcohol advertising in sports may also be influencing this decision.

Potential Apply of Proceeds

The $2 billion proceeds from the sale could be used for a significant one-off dividend payment to shareholders or a substantial share buyback program, potentially revitalizing investor confidence.

Looking Ahead

The completion of the RCB sale would mark a significant step in Diageo’s turnaround efforts. The outcome of the bidding process and the final valuation will be closely watched by investors and industry observers alike. The sale is expected to set a novel benchmark for IPL franchise valuations.