Diageo held talks about joint purchase of U.S. rival Beam-report

LONDON Sun Dec 9, 2012 8:06am EST

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LONDON Dec 9 (Reuters) - Drinks group Diageo Plc has held talks with Japanese brewer Suntory about making a joint bid to acquire bourbon whiskey maker Beam for more than $10 billion, Britain's Sunday Telegraph reported, citing unnamed sources.

Diageo is understood to have held the discussions in the spring and summer, the report said, although sources told the newspaper that no formal offer had been made and that a deal was unlikely in the near future.

In part, this was because Diageo are willing to pay about $65 a share, the report said. Shares in Beam, which owns top brands such as Jim Beam and Laphroaig malt whiskey, closed at $59.7 on Friday.

Both Diageo and Suntory were said to have spoken to other parties about a potential joint bid, including to private equity firms, the report said.

FTSE-100 group Diageo bought a majority stake in Indian-owned United Spirits last month and it is in long-running talks to buy tequila maker Jose Cuervo.

It also said on Wednesday it was interested in increasing its stake in premium vodka brand Ketel One.

Bankers at Goldman Sachs, Citigroup and UBS have been advising Diageo on the potential acquisition of Beam, the report said.

Diageo declined to comment on the press reports and Suntory were not immediately available for comment.

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