Diageo Plc, the world's largest spirits company, said that it has proposed to increase its stake in Chinese baijiu-maker Sichuan Shuijingfang Company to raise its holding to up to 60% through a partial tender offer.
Diageo offered 62 CNY ($9.50) per share of Sichuan, the company said in a statement. It currently holds a 39.71% stake.
The British-based maker of Johnnie Walker Scotch and Smirnoff vodka offered close to a 25% premium to Sichuan's closing price of 49.6 CNY on Monday.
Sichuan said that Diageo would pay a maximum of 6.15 billion CNY ($941.24 million) and that Diageo would fund the deal on its own.
Sichuan said that it would not be delisted if the deal goes through.
China currently represents a relatively small part of Diageo's business. Its exposure to the world's most populous country is mostly through its Scotch brands, as well as its investment in Shuijingfang's Swellfun, a premium brand of the fiery white spirit.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
