Vijay Mallya's United Spirits Ltd is set to strike a deal with world's largest spirits maker Diageo. The deal could involve Diageo picking up a minority stake of 14.9% in USL, reports The Times of India. Top UB Group officials, including Mallya, group CFO Ravi Nedungadi and USL president Vijay Rekhi, would meet the Diageo officials in New York on Wednesday, a PTI report said.

Diageo has also confirmed that both the parties are in talks.

The price at which the deal would be struck remains unclear, as Mallya has said the strategic investors expressed interest in the company when share price was trading at Rs 1,800. Currently the shares are trading at Rs 496.

UB Group's recent acquisitions have been funded by debt, including the $827million acquisition of Whyte & Mackay. The deal will help UB deleverage its balance sheet. Mallya has also reportedly pledged an 80% of his 34% stake in USL to institutions like IDFC, IL&FS, Citigroup and ICICI Bank to fund Kingfisher Airlines.

The deal may involve offloading of treasury stocks by USL, which were generated from the overlapping capital of merging group companies, which come to a 17% stake in the company. The stake may be offloaded from the treasury lot.

Diageo is the maker of iconic brands like Johnnie Walker whiskey and Smirnoff Vodka. The deal was also considered imminent as Vijay Mallya's son Siddharth Mallya recently joined Diageo's London office as a management trainee.

UB group is Inda's largest spirits manufacturer with about 55% of the market share. The deal with UB would certainly help Diageo in distribution of its products in the Indian market, and would provide UB with much needed cash.

Last year Diageo was also in talks with Cobra Beer, founded by India-born beer baron Karan Billimoria, but the talks failed due to differences over valuation.

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