Diageo may sell Whyte & Mackay to Alliance Global

Diageo Plc's United Spirits Ltd. is holding talks to sell the Whyte & Mackay spirits business to Alliance Global Group Inc, the Philippines-based ow-ner of Emperador brandy, people familiar with the process said.

The transaction may value the whisky maker at about 400 million pounds ($675 million), according to the people, who asked not to be identified because discussions are private. Talks are advanced, though they could still fall apart over matters including valuation, the people said.

Diageo, the world's biggest distiller, acquired Whyte & Mackay last year when it purchased a controlling interest in its Indian parent, United Spirits. Diageo in November said it offered to sell most of the business to assuage concerns by the UK Office of Fair Trading that the takeover could potentially lead to higher prices in the UK for blended whiskey.

Representatives for Dia-geo and United Spirits declined to comment. Officials at Alliance Global did not respond to repeated requests for comment.

In addition to owning Emperador Inc., the world's largest maker of brandy, Alliance Global has interests in property development, food and gaming. Emperador, controlled by billionaire Andrew Tan, said April 25 that first-quarter sales rose 17 per cent to 7.7 billion pesos ($173 million) and that it was seeking to expand its global footprint.

Diageo owns about 29 per cent of United Spirits, which combined with voting and other governance arrangements with former owner Vijay Mallya was enough for control. Diageo last month announced a further open offer to United Spirits investors, which could lead to it holding more than 50 per cent.

United Spirits bought Glasgow, Scotland-based Whyte & Mackay for 595 million pounds in 2007, gaining Scotch whisky brands including Jura and The Dalmore.