The world's largest spirits company Diageo PLC announced today that it has been given the green light to sell its Malibu brand and business to rival Allied Domecq by the US Federal Trade Commission.

The transaction, which was announced on 27 February 2002 is expected to close by Wednesday 22 May 2002. Diageo will receive £560m.

In addition, Diageo will receive $75m from Vivendi Universal in connection with completing the transaction and the dismissal of the litigation which Destileria Serralles and Allied Domecq have been pursuing with regard to Captain Morgan.

Diageo will also sell its Californian-based Mumm Cuvee Napa sparkling wine business to Allied Domecq for £27.5m.