Diageo keen to try a little tequila

SCOTLAND’S largest whisky distiller appears to be on the verge of buying a stake in Mexican tequila brand Jose Cuervo, valuing the business at about £1.9 billion.

Investment bankers from Goldman Sachs have been drafted in by Diageo – which makes Bell’s, J&B and Johnnie Walker – to complete negotiations with the Beckmann family, which owns the 217-year-old Mexican firm.

Diageo – which also makes Gordon’s gin, Guinness stout and Smirnoff vodka – is already Cuervo’s distributor in the United States and wanted to take a controlling stake in the firm.

But reports over the weekend suggest that the London-listed spirits giant, which is the world’s largest drinks company, may have to settle for a minority stake, along with assurances that it will eventually be able to buy the Mexican company outright further down the line.

Such a deal could be the last for Diageo chief executive Paul Walsh, who is expected to step down within the next two years. Walsh is believed to be interested in buying a stake in Vijay Mallya’s UB Group, which owns Glasgow-based distiller Whyte & Mackay.