Drinks group Diageo has pulled out of a £320m deal to buy the Montana Wines brand from Pernod Ricard.

Paul Walsh, CEO of Diageo, said: “We have examined the opportunities that the Montana business presents and have concluded that it does not fit our investment criteria and have decided not to proceed.”

Pernod Ricard gave Diageo the option to purchase the brand earlier this year following Pernod’s acquisition of Allied Domecq.