Diageo, the world's largest drinks company, has bought Constellation Spirits' Quebec distillery and bottling plant.

Diageo said it had agreed to buy the Schenley distillery and bottling operation in Valleyfield, Quebec as part of a deal expected to be sealed this month.

The Constellation Spirits division had been looking to offload the distillery following its decision to consolidate Canadian production at its Lethbridge facility in Alberta.

Schenley has been a long-term supplier to Diageo of both distillate and packaging services. As part of the agreement, Diageo will retain the employees.

"The Schenley distillery has been an integral part of our supply chain, providing high quality distillation and bottling services for a variety of Diageo brands," said John Council, president of Diageo Americas Supply.

"After reviewing a number of options, we have determined that the possibility to purchase this facility was a great opportunity and the best way forward to support the continuing growth of our brands.

"The facility has dedicated and skilled employees, a welcoming community and business environment and we look forward to being present and operating there."