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The Vijay Mallya-led liquor firm United Spirits is likely to sell stakes to UK-based Diageo Plc, the world's largest distiller, the two companies said in a statement.

"United Spirits Limited and Diageo plc confirm that Diageo plc is in discussion with United Spirits Limited and United Breweries (Holdings) Limited in respect of possible transactions for Diageo plc to acquire an interest in United Spirits Limited," a statement issued jointly by the two companies said.

"However, there is no certainty that these discussions will lead to a transaction," it said.

Talking to reporters, United Spirits chairman Mallya also confirmed that the two companies were in talks but said there was no certainty of the transaction.

"This is at discussion stage and there is no certainty that transaction will take place. I will say nothing more, nothing less," Mallya said.

Share price of United Spirits surged almost three percent on the stake sale buzz.

United Spirits was trading 2.69 percent higher at Rs.1,082.40 at the Bombay Stock Exchange (BSE) in late afternoon trade, after touching an intra-day high of Rs.1,098.80.

The announcement came at a time when Mallya-led firms, notably Kingfisher Airlines, are reeling under huge financial troubles.