Investment bank Lehman Brothers has upgraded shares in the global drinks group Diageo to 'equal-weight' from 'underweight', with a price target of GBP11.50.

Lehman said that with consolidation in the beer industry well underway, it believes that the realisation of Diageo's aspiration to become a leader in Total Beverage Alcohol (TBA) is getting closer.

The bank added that even with conservative assumptions, a merger with a major global brewer could increase value per share to GBP14.00.