Disposal

Diageo PLC
25 July 2002


                                                                    25 July 2002


 Diageo agrees to sale of Burger King to consortium composed of Texas Pacific,
                         Bain Capital and Goldman Sachs


Diageo plc today announces that it has agreed to the sale of Burger King
Corporation to a group composed of Texas Pacific Group (TPG), Bain Capital and
Goldman Sachs Capital Partners.

Under the agreement:

  • Diageo will receive $2,260 million in cash for Burger King Corporation on
    a debt free basis. Burger King Corporation will retain a minimum level of
    working capital, which will include $15 million of cash.

  • A portion of the purchase price is dependent upon Burger King Corporation
    satisfying certain performance targets in its financial year ended 30 June
    2002.

  • The transaction conditions include purchaser's financing, Burger King
    Corporation meeting certain performance targets during the period to
    closing, there being no material breach at closing of contractual
    representations given by Diageo, and required regulatory approval. The
    transaction is expected to close in the fourth quarter of this calendar
    year.


Diageo anticipates that following completion of the transaction the cash
proceeds will, in accordance with Diageo's commitment to value creation, be made
available for reinvestment in its premium drinks business and for return to
shareholders.

For the year ended 30 June 2001 Burger King's UK GAAP operating profit, before
exceptional items and goodwill amortisation, was $257 million. At 31 December
2001 its net assets, before inter company balances and net borrowings, were $2.2
billion. Goodwill previously written off was $1 billion.

The tax cost on the disposal is estimated at approximately $175 million.

In March 2002 Diageo commenced a review of options for the separation of Burger
King Corporation as the final step in its realignment behind premium drinks. The
agreement announced today is an important step in the conclusion of that
process.

Announcing the agreement, Paul Walsh, CEO of Diageo, said:

'Today's announcement represents an important milestone in Diageo's journey. In
the last two years since we announced our intent to exit food, we have brought
together our global spirits, wine and beer businesses, including exciting new
assets from Seagram. Now we will focus all our management skills to deliver
sustainable top and bottom line growth and create still greater value for our
shareholders.

'This transaction provides for the future for Burger King Corporation, its
franchisees, employees and customers. In the past sixteen months Diageo has
brought together a new management team for Burger King, recast the strategy and
delivered significantly improved performance across the business. Through to
completion, and under its new owners, Burger King will be able to build on this
improved platform, and I wish the business every success.'


                                     -Ends-

For further information:

Media enquiries:       Ian Wright / Isabelle Thomas     + 00 44 (0) 20 7927 5967
[e-mail]

Investor enquiries:    Catherine James                  + 0044 (0) 20 7927 5272
[e-mail]



Notes to editor:

1. Diageo is the world's leading premium drinks business with an outstanding
collection of beverage alcohol brands across spirits, wine and beer categories.
These brands include: Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Cuervo,
Tanqueray, Captain Morgan, and Beaulieu Vineyard and Sterling Vineyards wines.

Diageo is a global company, trading in over 180 markets around the world. The
company is listed on both the London Stock Exchange (DGE) and the New York Stock
Exchange (DEO). For more information about Diageo, its people, brands and
performance, visit us at www.diageo.com

2. BKC was founded in 1954 and is headquartered in Miami Florida. The Burger
King system operates restaurants in all 50 states and 55 countries throughout
the world. The entire Burger King restaurant system generated $11.2 billion in
sales in over 11,000 worldwide restaurants in the year ended 30 June 2001.

3. Forward-looking and cautionary statements. This press release contains
forward-looking statements based on management's current expectations and
assumptions. Such statements are subject to certain risks and uncertainties that
could cause actual results to differ, including the risk that the conditions to
the transaction may not be satisfied. The company undertakes no obligation to
publicly revise any forward-looking statements to reflect future events or
circumstances.

4. Diageo's financial adviser in the disposal has been Greenhill and Co. UBS
Warburg and Merrill Lynch International have also provided financial advice to
Diageo in relation to the transaction. Sullivan & Cromwell have acted as legal
counsel.

Greenhill & Co is acting for Diageo plc and no one else in connection with the
sale of Burger King Corporation and will not be responsible to anyone other than
Diageo plc for providing the protections afforded to customers of Greenhill &
Co. or for giving advice in relation to the sale.

UBS Warburg Ltd, a wholly owned subsidiary of UBS AG acting through its business
group UBS Warburg, is acting for Diageo in connection with the sale of Burger
King Corporation and no-one else and will not be responsible to anyone other
than Diageo plc for providing the protection offered to clients of UBS Warburg
Ltd. nor for providing advice in relation to the sale.

Merrill Lynch International is acting for Diageo in connection with the sale of
Burger King Corporation and no-one else and will not be responsible to anyone
other than Diageo plc for providing the protection offered to clients of Merrill
Lynch International nor for providing advice in relation to the sale.

5.Texas Pacific Group (TPG) is a private investment firm that manages a series
of equity investment funds with more than $7 billion of committed equity
capital. Over the past decade, TPG has completed more than 50 transactions and
invested over $4 billion of equity capital. TPG's historical investments include
Beringer Wine Estates, Continental Airlines, Del Monte Foods, Ducati
Motorcycles, J. Crew, Oxford Health Plans, Petco and Seagate.

6. Bain Capital is a private investment firm that manages more than $14 billion
of committed capital through a range of private equity, collateralized debt
obligation and public equity hedge funds. Over the past two decades, Bain
Capital has completed more than 150 private equity transactions including
Domino's Pizza, Shoppers Drug Mart, Staples, KB Toys, Sealy, Brookstone, Gartner
Group and Totes/Isotoner.

7. Goldman Sachs Capital Partners has raised seven private equity funds and two
mezzanine funds since 1986 with $14 billion of committed capital. Notable
investments include Kookmin Bank, Cognis, Messer Griesheim, MONY Life Insurance
Company, Orion Power Holdings, Polo Ralph Lauren and Western Wireless/
VoiceStream.



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