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Diageo gets control of distiller
Source: Bloomberg News |
June 28, 2011, Tuesday
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DIAGEO Plc, the world's largest distiller, yesterday said it has received regulatory approval to take a majority stake in China's Sichuan Chengdu Quanxing Group as it seeks to increase its presence in Asia.
Authorities approved Diageo's purchase of a 4 percent holding in Quanxing from Chengdu Yingsheng Investment Holding Co for about 140 million yuan (US$21.6 million). Diageo will own about 53 percent of Quanxing, one of the largest makers of Chinese white spirits by volume in the country, the company said yesterday.
Diageo said it will seek approval from the China Securities Regulatory Commission to make a required bid for Shanghai-listed Sichuan Shuijingfang Co, in which Quanxing holds a 39.7 percent stake, and "expects to receive the CSRC approval in due course."
Under Chinese rules, if Diageo has control of Quanxing, it must launch a mandatory tender offer for the whole of Shuijingfang. The maximum amount payable for the rest of Shuijingfang would be about 6.3 billion yuan, London-based Diageo estimates.
Diageo said it will fund the Shuijingfang acquisition through "diversified financing sources and strong global cash generation." It has also agreed to facilitate financing for Quanxing of as much as 2 billion yuan for business development, "subject to the right opportunities becoming available."
Authorities approved Diageo's purchase of a 4 percent holding in Quanxing from Chengdu Yingsheng Investment Holding Co for about 140 million yuan (US$21.6 million). Diageo will own about 53 percent of Quanxing, one of the largest makers of Chinese white spirits by volume in the country, the company said yesterday.
Diageo said it will seek approval from the China Securities Regulatory Commission to make a required bid for Shanghai-listed Sichuan Shuijingfang Co, in which Quanxing holds a 39.7 percent stake, and "expects to receive the CSRC approval in due course."
Under Chinese rules, if Diageo has control of Quanxing, it must launch a mandatory tender offer for the whole of Shuijingfang. The maximum amount payable for the rest of Shuijingfang would be about 6.3 billion yuan, London-based Diageo estimates.
Diageo said it will fund the Shuijingfang acquisition through "diversified financing sources and strong global cash generation." It has also agreed to facilitate financing for Quanxing of as much as 2 billion yuan for business development, "subject to the right opportunities becoming available."
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