Diageo may pick up 10-13 per cent stake in Mallya`s United Spirits: report

Mumbai: European drinks maker Diageo Plc is in talks to buy 10-13 per cent stake in Vijay Mallya''s United Spirits Ltd for $500-600 million, reports quoting unnamed sources said.

United Spirits is ranked number three in the world in terms of volume.

Diageo, which has many famous brands like Smirnoff Vodka and Guinness Beer, is not looking at management control or a place in the board.

United Spirits, India`s top drinks maker, whose enterprise value has been pegged at over $5 billion, might be open to placing a small stake with Diageo, without losing management control, the report said.

United Spirits, a part of the UB group, in May acquired Scottish spirits maker Whyte & Mackay for $1.2 billion.

European spirit makers are keen to increase their presence in India`s fast-growing alcoholic drinks market, but want better trademark protection and lower tariffs on imported wines and spirits.

Diageo CEO Paul Walsh has been seen meeting Vijay Mallya on many occasions. This could be start of a new partnership for Mr. Mallya, reports said.

Officials at the Indian unit of Daigeo declined to comment on the rumour. United Spirits representatives also denied any talks with Diageo regarding the stake sale.