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World's largest spirits maker Diageo and Kohlberg Kravis Roberts & Co (KKR) may pick up a stake in Vijay Mallya's United Spirits Ltd (USL). While private equity major KKR could pick up a 10% stake in the firm, Diageo may pick up a 14.99% stake, reports Economic Times. The report adds that the deal structure is being worked out so as to avoid Securities and Exchange Board of India’s (SEBI) takeover code.

KKR has recently shown interest in alcoholic beverages space with buy-out of Anheuser-Busch InBev’s Oriental Brewery for $1.8 billion. The deal to acquire the South Korean brewery was one of the largest in recent times.

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The report also says that KKR could ultimately exit the USL investment by selling the stake to Diageo itself. This is similar to KKR-Oriental Brewery deal, where Anheuser-Busch InBev has the right to buy back the company within five years.

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Diageo and USL have been in talks since November last year. Other international spirit makers like Bacardi had also expressed interest in USL, as have other private equity players. Diageo, maker of brands like Johnnie Walker and Smirnoff, is trying to avoid European Union competition laws with the present deal structure.

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If Diageo acquires significant stake in USL, the parent of Scottish distiller Whyte & Mackay (W&M), it gives control over W&M.

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