Diageo has pulled out of talks to purchase a stake in top-selling tequila brand Jose Cuervo in a surprise move that fuelled speculation that the world's biggest spirits maker could now set its sights on smaller rival Beam Inc.The collapse of discussions with Cuervo, which has a distribution deal with Diageo due to end in June 2013, will leave Diageo without a major tequila brand and Cuervo without a distributor outside its home market of Mexico.Shares of Beam, which owns the world's No. 2 tequila, Sauza, were up 3.5 percent at $61.99 in New York, while Diageo shares were down 1.4 percent at 1860 pence in London. Shares of French rival Pernod, which an industry source said could now link up with Cuervo, were up nearly 1 percent in Paris.Faced with sluggish growth in recession-hit European economies, Diageo has been looking to tap burgeoning middle classes in Africa, Asia and Latin America, where it aims to make around half of its turnover by 2015.
Beam Inc. (Beam) is a premium spirits company that makes and sells branded distilled spirits products in major markets worldwide. Shares of BEAM traded higher by 3.46% or $2.075/share to $61.98. In the past year, the shares have traded as low as $48.70 and as high as $64.00. On average, 833553 shares of BEAM exchange hands on a given day and today's volume is recorded at 842981.
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