The speculation comes hot on the heels of the news that the Indian business empire, headed by Dr Vijay Mallya, has indicated that it is considering selling off some of its interest, including Glasgow-based distiller Whyte and Mackay.
A Diageo spokesperson said: "There are discussions between Diageo and United Spirits but these discussions have not yet identified a structure which is acceptable to both parties. The discussions will continue but, as we have said previously, there is no certainty that they will result in a transaction between the two companies."
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