Diageo is reportedly considering a billion-pound bid for Jose Cuervo.
The drinks giant, whose stable of spirits includes Smirnoff vodka and Johnny Walker whisky, already holds the UK distribution rights to Jose Cuervo.
The tequila brand, which is owned by the Beckmann family, is valued at up to £1.2bn.
Last month Diageo completed a £1.3bn swoop for Turkish drinks group Mey Icki in a move designed to increase its exposure to emerging drinks markets.
Just last week it was linked with a £500m move for Polish spirits maker Stock.
Diageo buys Turkish spirit maker Mey Icki (26 February 2011)
European sales slow at Diageo (10 February 2011)