Diageo terminates talks with tequila giant Jose Cuervo

Diageo, the FTSE 100 drinks group which owns brands such as Johnnie Walker, Smirnoff and Guinness, has announced that it has called off talks to buy tequila giant Jose Cuervo after being unable to 'agree a transaction'.

The London-listed beverage firm already distributes Jose Cuervo in North America and Europe but has said that it will now terminate the current distribution agreement at the end of June 2013.

"Diageo has had a long and successful relationship with the Cuervo brand and we are proud of what we have achieved for the brand as its distributor over many years," said Chief Executive Paul Walsh.

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"We believe that the future of the brand would be best delivered by aligning ownership of the brand with its route to market and I have no doubt that Diageo has the best route to market for this brand. However it has not been possible to agree a transaction which delivers value for Diageo's shareholders and therefore, by mutual agreement, we have terminated our discussions," he said.