Diageo is to announce this week that up to half of the proceeds it made from the sale of its stake in US food group General Mills will finance a buyback programme, according to a press report yesterday.

The UK's Sunday Times said that Diageo CEO Paul Walsh expects to use around £500m to buy back shares. However, the £1.2 billion raised from the General Mill sale will also be used to reduce debt and top up the company pension fund.

The news will be announced at this week's annual meeting, the Sunday Times said.