Diageo (NYSE:DEO) has walked away from negotiations to continue distributing Jose Cuervo tequila, the company said in an official statement. Diageo distributes the liquor in markets outside Mexico, where it generated more than $482 million in sales in the company's most recent fiscal year. That represented nearly 3% of the company total net sales in that period. The current distribution arrangement ends in June 2013.

The move also represents an apparent abandonment of the company's years-long effort to buy the popular brand. Speculation is rife, however, that the walkout is merely the company's latest tactic in the attempt.

In its statement, the company quoted CEO Paul Walsh as saying that "it has not been possible to agree a transaction which delivers value for Diageo's shareholders and therefore, by mutual agreement, we have terminated our discussions."

Tequila Cuervo, the drink's manufacturer, has not commented on the matter.

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