Report: Diageo Being Eyed By Brazilian Billionaire

(RTTNews) - Brazilian billionaire Jorge Paulo Lemann is in talks to acquire U.K.-based brewer Diageo Plc (DGE.L, DEO), according to Brazilian magazine Veja. Shares of Diageo are gaining more than 7 percent on the London Stock Exchange following the news of the reported takeover bid.

Lemann, the founder of private equity firm 3G Capital, is said to be in talks with other executives about making a bid for Diageo, which owns famous liquor brands such as Johnnie Walker, Crown Royal, Ketel One and Guinness.

Lemann also owns a stake in Anheuser-Busch InBev NV (BUD, AHBIF.PK), the world's largest brewer. Lemann's private equity firm 3G Capital orchestrated the $52 billion 2008 buyout that created Anheuser-Busch InBev.

Diageo, in mid-April, reported a 0.7 percent decline in third-quarter net sales on an organic basis, reflecting continued tough conditions in emerging markets and subdued consumer demand in some developed markets.

In May, shares of Diageo's peer SABMiller Plc (SBMRY.PK, SAB.L) rose following media reports that 3G Capital, along with billionaire Warren Buffett and Anheuser-Busch InBev, were seeking to acquire the company.

Lemann and Buffett had joined hands in the merger of Kraft Foods Group, Inc. (KRFT) with ketchup maker H.J. Heinz Co. in late March. The deal was financed by a $10 billion investment from 3G Capital and Warren Buffett's Berkshire Hathaway, the combination that had taken Heinz private for about $23 billion in 2013.

DEO closed Friday's trading at $118.00. In Monday's pre-market activity, the stock is down $2.35 or 1.99 percent to $115.65.