Diageo to acquire 100% stake in Shuijingfang
Diageo is to acquire the remaining stake in Chinese baijiu producer Sichuan Chengdu Shuijingfang Group Company (SJF Holdco), making it the sole shareholder.
The British drinks group has been granted permission by the Chinese authorities to acquire the remaining 47% stake in the company for £233 million, after buying a controlling share in 2011.
The acquisition will transform SJF Holdco from a joint venture into a wholly-owned foreign enterprise owned completely by Diageo. It will also give Diageo an increased indirect interest in the Shanghai-listed company Sichuan Shuijingfang Co Ltd of 39.71%, up from the current 21.05% it currently owns.
With baijiu one of the top-selling spirits in China, Diageo is hoping to build Shuijingfang into the leading international baijiu brand as Chinese businesses continue to expand across the globe.
“I am delighted to have gained approval from the Chinese authroties to acquire the rest of our Chinese partners’ interest in SJF Holdco,” said Gilbert Ghostine, president of Diageo Asia Pacific. “This is a milestone in the journey we began with our partners six years ago. As the controlling shareholder in Shuijingfang, Diageo will continue to work with the senior Chinese management to build Shuijingfang into the leading international baijiu brand. I have every confidence in the long-term future of the baijiu category in China.”