Diageo proposes to up stake in China’s Sichuan ShuijingfangBy Nicola Carruthers
Diageo has offered to increase its stake in Chinese baijiu producer Sichuan Shuijingfang Company to up to 60% through a partial tender offer.
The Johnnie Walker maker proposed CNY62 (US$9.50) per share, the company said in a statement. Diageo currently holds a 39.71% stake.
The proposal “is still under discussion and there can be no certainty that any offer will be made”.
Sichuan Shuijingfang Company is based in Chengdu, western China, and produces Swellfun liquor as well as a number of wine brands. Its products are available within both domestic and overseas markets.
In 2013, Diageo acquired the remaining stake in Sichuan Chengdu Shuijingfang Group Company, which was the largest shareholder of the Shanghai-listed Sichuan Shuijingfang Company.
Consumption of ‘national spirits’ such as baijiu will grow 2.1% to 1.48bn nine-litre cases by 2021, almost half of the global total, according to a recent report by Vinexpo and the IWSR.