Diageo and its wad of cash

By: Chris Mercer - 26 August 2010 15:29

Diageo has built up a significant pile of cash over the last year and speculation is growing as to what the company will do with it.

Diageo had a free cashflow of GBP2bn (US$3.09bn) at the end of its most recent fiscal year. Group CEO Paul Walsh told journalists today (26 August) that the company might consider a share buy-back during the coming 12 months, should economic conditions not worsen.

What is clear, is that the company is keeping a very open mind indeed on how to "return value to shareholders" - and that is likely to fuel more speculation (like this) that the firm is on the acquisition trail.

Does Walsh have Moet Hennessy on speed dial? I hear Cognac is doing well in those emerging markets.