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Diageo, the world's leading spirits, wine and beer company is in race to acquire a 30 per cent stake in UK- based Karan Billimoria's Cobra Beer. Diageo is in fairly advanced stages of talks and plans to pick up the stake for about $100 million, reports Economic Times. Cobra Beer is seeking a valuation of about $400 million and has appointed NM Rothschild as an advisor for its fund-raising plans. Goldman Sachs is also believed to be in the race. A couple of months back it has been reported, that the promoters of Cobra could look at exiting the company over a 3-5 year time-frame. Cobra sold 4.1 million cases of beer worldwide last year, with 23 per cent of its sales in India. Diageo strongest brands in the country are Johnnie Walker and Smirnoff, and may be planning to capture the fast growing beer market in the country. with this acquisition. The global giant has targeted sales revenues of £500 million (Rs 4,154.9 crore) in the next three years in India. Diaego has also been increasing its presence in the Indian wine market. It tied up with Reliance Fresh last year to distribute its wines and was rumored to take a stake in Sula Vineyards earlier this year. Some of the other brands in Diageo global portfolio are Ciroc vodka, Talisker scotch, Bailey's liqueur and stout beer Guinness.

Last year Cobra had raised $55 million from US hedge fund Och-Ziff Capital Management. It was also recently reported that Cobra Beer is looking at an Indian listing of its domestic subsidiary as the company is set to invest up to $100 million by 2010 in its India operations. The company is also planning a listing in UK this year.Cobra recently acquired 76 per cent stake in Iceberg brewery in Bihar and has bottling arrangements with eight breweries across the country. The brands operated by Cobra beer are King Cobra, Cobra Beer and the recently acquired strong beer, Iceberg. Cambridge graduate Billimoria founded the premium brand company in 1989 when he was 27.