Diageo closes in on Vijay Mallya's United Spirits United Spirits is valued at around 130bn rupees (£1.5bn) and owns Whyte & Mackay, the 168-year-old Scotch whisky brand. A spokesman for Diageo declined to comment on Friday but Paul Walsh, chief executive of the world's biggest drinks company, reiterated his interest in taking a minority stake in United Spirits at its year-end results presentation in London earlier this month. However, he insisted any deal would have to be on the right terms and he would not be pressured into "frittering away" Diageo's £1.6bn cash mountain. A source close to Diageo confirmed the group was back in talks with Mr Mallya but cautioned that the Indian entrepreneur was often in discussions with several parties at any one time so there was no certainty an agreement would be reached to buy part of his stake in United Spirits. "It's something we'd love to do but we are not going to do it in a foolish way," said the source. Our underlying business is doing really well but we are underweight in India. A deal with United Spirits would give Diageo crucial access to India's local spirits market, which is notoriously difficult to penetrate given its complicated bureaucracy and punishing levels of duty. However, the potential riches on offer for those foreign companies able to break through the barriers are huge, with one report last year estimating that the Indian market could reach $45bn in value by 2015, driven by a growing taste for luxury spirits such as Johnnie Walker among the country's burgeoning middle classes. Jamie Isenwater, drinks analyst at Deutsche Bank, said a deal with United Spirits would transform Diageo's Indian business, which is currently heavily reliant on the duty free market. Mr Isenwater also cautioned that Diageo would potentially face regulatory hurdles in the UK, where it is a dominant player in the Scotch industry alongside France's Pernod Ricard. "They would have to sell Whyte & Mackay," he said. United Spirits denied there was a specific proposal from Diageo on the table.