The worm has turned for Diageo and Cuervo

U.K.-based Diageo, whose North American headquarter is in Norwalk, announced talks to buy tequila-maker Jose Cuervo have ended.

Diageo was discussing a deal for the iconic brand with JB y Compania S.A. de C.V. and Lanceros S.A. de C.V.

With talks failing, Diageo said it will work to ensure the orderly termination of the current distribution agreement, which should be accomplished by the end of June 2013.

‘Diageo has had a long and successful relationship with the Cuervo brand and we are proud of what we have achieved for the brand as its distributor over many years,” said Paul S Walsh, Diageo CEO in a prepared statement. “We believe that the future of the brand would be best delivered by aligning ownership of the brand with its route to market and I have no doubt that Diageo has the best route to market for this brand. However it has not been possible to agree a transaction which delivers value for Diageo’s shareholders and therefore, by mutual agreement, we have terminated our discussions.’”

Rob Varnon