Diageo looks into José Cuervo deal

The drinks giant has reportedly been consulting Goldman Sachs and other banks as it seeks to gain control of the Tequila brand.

The banks are expected to value José Cuervo at US$3 billion, however it is not thought likely that Diageo will be able to clinch a majority share.

Chief executive Paul Walsh recently spoke of his desire to gain greater control of the brand – which it currently distributes in the US, a deal which expires in 2013.

Despite Walsh’s desire to gain a majority share, possibly in exchange for shares in Diageo for the brand’s current owners the Beckmann family, it is thought likely that he will have to settle for a minority share with the possibility of increasing it in the future.

The on-going talks are being held in private but several new agencies have reported that, “it’s unclear whether all of the (Beckmann) family members are committed to the process”.

A deal is hoped for by the summer and possibly as early as May.