Diageo to Convert Chinese Joint Venture Into Fully-Owned Foreign Enterprise
Diageo has received approval from the Chinese authorities to acquire the remaining 47% stake in Sichuan Chengdu Shuijingfang Group Company Ltd. (SJF Holdco) (formerly Sichuan Chengdu Quanxing Group Company Ltd) owned by its Chinese partners. As a result, SJF HoldCo will be converted from a joint venture into a wholly foreign-owned enterprise owned by Diageo. On completion, Diageo's indirect interest in the Shanghai-listed company, Sichuan Shuijingfang Co., Ltd. (Shuijingfang), will rise from 21.05% to 39.71%. The total consideration for the 47% of SJF Holdco will be approximately £233 million.
Gilbert Ghostine, President of Diageo Asia Pacific, said:
“I am delighted to have gained approval from the Chinese authorities to acquire the rest of our Chinese partners' interest in SJF HoldCo. 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 Bai Jiu brand. I have every confidence in the long-term future of the Bai Jiu category in China.”
Vermilion Partners acted as transaction adviser to Diageo. Haiwen acted as legal adviser to Diageo on the transaction. HSBC acted as partner bank for FX and Settlement.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.