According to sources, the deal will be announced tomorrow. However, the exact details such as the quantum of stake and valuation could not be ascertained.
When contacted, an UB Group spokesperson declined to comment.
According to different reports, the deal could entail Diageo picking up to 51 per cent stake in USL which could be valued between USD 1 billion and USD 2 billion.
In September this year, United Spirits had confirmed that it was in talks with UK-based Diageo Plc for a stake sale.
"United Spirits and Diageo Plc confirm that the UK-based company is in discussion with it and United Breweries Holdings in respect of possible transactions to acquire an interest in the liquor firm," United Spirits had said in a filing to BSE.
USL is the world's second largest spirits maker after Diageo and markets various liquor brands including Signature, Bagpiper, Antiquity, Royal Challenge, Signature in the country.
USL's sales volumes stood at 3.13 crore cases for the first quarter ended June 30.
Mallya-led United Breweries Holdings Ltd (UBHL), the promoter of USL, holds 18.03 per cent stake as on September 30.
Bogged down by the troubles of group firm Kingfisher Airlines, Mallya has been forced to seek ways to raise funds as lenders to the carrier have refused to sanction further loans.
State Bank of India (SBI), the largest lender to the airlines, wants the airline's promoters to bring in a minimum of USD 1 billion (about Rs 5,400 crore) from any source by month-end for its revival.
Already the country's aviation regulator has suspended operating permit last month.
UBHL has said the company along with its subsidiaries has significant financial exposure on various counts to KFA, which has ceased to be a subsidiary with effect from February, 18, 2012 and is now an associate company.
This exposure as on March 31, 2012 included equity investment of Rs 2,114.28 crore, loans and advances Rs 1,048.7 crore and other receivables Rs 209.08 crore, and corporate guarantees to banks/aircraft lessors Rs 8,925.86 crore.
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