Diageo expects to issue bond

Diageo PLC
27 April 2005

27 April 2005

Diageo expects to issue a benchmark USD global bond

Diageo, the world's leading premium drinks business, has today announced that it
expects to issue a benchmark US-dollar global bond, subject to market
conditions, and to this end has had discussions with the credit rating agencies.

Approximately $900 million of Diageo's current debt will mature between May and
August 2005 and the company views current market conditions as a favourable
opportunity to pre-fund some of this maturing debt before it enters its closed
period.  Diageo's closed period commences in July and ends with the announcement
of the preliminary results in September 2005.

Capital structure

Diageo's policy, as outlined in the October 2004 AGM statement, is that the
appropriate capital structure for the group is one which achieves capital
efficiency, maximises flexibility and gives the appropriate level of access to
the debt markets at attractive cost levels, and that this is best achieved by
targeting a range of ratios which are currently broadly consistent with a single
A credit rating.

Acquisition strategy

The pace of consolidation activity in the total beverage alcohol sector is
increasing - with the offer by Pernod Ricard for Allied Domecq as the latest
example.  In this environment, Diageo expects to continue to evaluate
opportunities to make acquisitions that complement its existing premium drinks
brands and create shareholder value.  The funding options for potential
acquisitions include the use of the group's substantial free cash flow, the
possible monetization of the remaining shares in General Mills and borrowings.
In limited circumstances, Diageo is prepared to change its targeted range of
financial ratios for a period of time provided that those new ratios are broadly
consistent with a credit rating in the single A band.

This press release shall not constitute an offer to sell or the solicitation of
an offer to buy securities either in the United States or any other
jurisdiction, nor shall there be any sale of these securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration and qualification under the securities laws of any such
jurisdiction.  No offer of securities is being and will be made to persons who
are established, domiciled or have their residence ('are resident') in the
Netherlands. Any public offering of securities in the United States is being
made solely by means of a prospectus supplement to the prospectus included in
the Registration Statement filed by Diageo plc, Diageo Capital plc, Diageo
Finance B.V. and Diageo Investment Corporation and previously declared
effective.

                                     -ends-

Diageo contacts:

Investor enquiries  Catherine James [phone]  [e-mail]

Media enquiries     Isabelle Thomas [phone]  [e-mail]


Notes to editors:

Diageo is the world's leading premium drinks business. With its global vision,
and local marketing focus, Diageo brings to consumers an outstanding collection
of beverage alcohol brands across the spirits, wine and beer categories
including Smirnoff, Guinness, Johnnie Walker, Baileys, J&B, Cuervo, Captain
Morgan and Tanqueray, and Beaulieu Vineyard and Sterling Vineyards wines. Diageo
trades in some 180 markets around the world and is listed on both the New York
Stock Exchange (DEO) and the London Stock Exchange (DGE). For more information
about Diageo, its people, brands and performance, visit us at www.diageo.com


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