Diageo tight-lipped amid takeover rumours

Diageo is remaining tight-lipped over rumours it is being eyed for acquisition by Brazil’s richest man, as shares in the UK group skyrocket.

Diageo’s shares have jumped following reports Brazilian billionaire Jorge Paulo Lemann is considering bidding to acquire the group

Reports circulated over the weekend that Jorge Paulo Lemann is considering making an offer to takeover the world’s largest drinks group through his private equity firm 3G Capital and in partnership with US business tycoon Warren Buffett.

However, Diageo has declined to comment on what it calls “market speculation and rumour”. Representatives for Lehmann have also not commented.

The report was first published in Brazilian weekly newspaper Veja, which did not disclose the sources of its information.

Shares in Diageo, maker of Johnnie Walker Scotch whisky and Smirnoff vodka, have soared since the article was published on Friday.

In London, shares jumped 8.7% to a seven-year high of £19.00, thus valuing the company at £48 billion, reports Bloomberg.

Lehmann’s 3G Capital controlled 65% of the Brazilian beer market before merging with Belgium’s Interbrew NV in 2004. Four years later, the company engineered a US$52bn merger with Anheuser-Busch Cos. to create the world’s largest brewer, AB InBev.

Diageo acquired a controlling stake in India’s largest drinks group United Spirits last summer. The firm also agreed to swap its Bushmills Irish whiskey brand for full ownership of Don Julio Tequila, in which it already owned a 50% stake.

Reporting its full-year financial results for 2014/15, Diageo said China’s ongoing anti-extravagance measures had “severely impacted” its sales, which declined by £1.1bn.