Diageo Statement

Diageo PLC
25 August 2005


                                                                  24 August 2005

Diageo purchases put options over 25 million General Mills shares



On 24 August 2005, Diageo and Lehman Brothers International (Europe) entered
into a put option agreement under which Diageo purchased European-style put
options exercisable beginning 4 November 2005, covering 25 million shares of
common stock of General Mills from Lehman Brothers. Under this agreement, Diageo
has the option to sell all of its remaining 25 million shares of common stock of
General Mills to Lehman Brothers for settlement over five business days between
4 and 10 November 2005, for the exercise price of $51.56 per share. The premium
to be paid by Diageo for the put options is $5.56 per share, payable at the time
of settlement. While the sale of these shares is subject to market conditions
and contractual restrictions, Diageo is committed to the disposal of its
holdings in General Mills and previously sold in 2002 call options to General
Mills for a premium of $3.07 per share. Diageo views this transaction as an
effective hedge for the disposal proceeds of its remaining stake in General
Mills.

Diageo will continue to retain the rights to ordinary dividends while it remains
an owner of the General Mills shares.

Commenting, Paul Walsh, CEO of Diageo, said

' We are delighted to be able to make this announcement today. This transaction
gives us certainty as to the disposal proceeds we would receive from a disposal
of our remaining holding in General Mills which could take place in November
this year at $1,154 million net of costs.

Coming as it does less than two months after the refinancing of Burger King,
Diageo is now fully focused on its position as the world's leading premium
drinks company '.

                                     -ends-
Contact details

Investor Relations:
Michael Mulhall [phone] [e-mail]
Kelly Padgett [phone] [e-mail]

Media Relations:
Isabelle Thomas [phone] [e-mail]

Note to editor:
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, Jose Cuervo, Captain
Morgan, Tanqueray, Beaulieu Vineyard, Sterling Vineyards and Chalone wines.
Diageo trades in some 180 countries around the world and is listed on both the
New York Stock Exchange (DEO) and the London Stock Exchange (DGE).




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