The move by FTSE-100 listed firm, reported by Sky News, would likely see wine brands Blossom Hill and Piat d’Or sold off to Australian wine maker Treasury Wine Estates.
The deal could be announced as early as this month, but Treasury is yet to sign on the dotted line. If it does Blossom Hill would join Treasury wine brands Penfolds, Wolf Blass, Lindermans and Matua.
Ivan Menezes, chief executive of Diageo had been under some pressure to unload the wine unit, which only makes up around five per cent of global revenues.
Investors toasted the speculation, with shares in Diageo up by 3.1 per cent to 1,771p yesterday.
