Diageo eyes move for tequila giant

Published on Friday 18 March 2011 21:24

The world's biggest spirits maker, Diageo is understood to be considering a $2 billion (£1.2bn) bid for tequila brand Jose Cuervo as consolidation within the global drinks sector intensifies.

The Beckmann family, which owns Jose Cuervo, is understood to have appointed Barclays to explore a possible sale of all or part of the tequila brand.

Diageo, whose products include Johnnie Walker, Bell's, Smirnoff, Guinness and Gordon's Gin, is expected to be a frontrunner as it already owns the international distribution rights for Jose Cuervo.

Diageo yesterday declined to comment but chief executive Paul Walsh froze share buybacks in order to build a warchest for takeovers this year as he seeks to address the firm's reliance on European and North American markets.

Last month Diageo agreed to buy Turkish spirits maker Mey Icki for 1.3bn while it has also been linked to one of Poland's largest vodka companies, Stock Spirits, whose brands include Czysta de Luxe.

Other companies which might be interested in Jose Cuervo included Bacardi, Pernod Ricard and Brown-Forman, according to one newspaper.

The world's drinks sector has already seen a spate of deals over the past year.

French drinks group Remy Cointreau has entered talks to sell its loss-making Champagne business.

There has also been speculation of bidders for the spirits arm of American consumer goods group Fortune Brands, and rumours Anheuser-Busch InBev may target SABMiller.