(Reuters) - Diageo Plc (DGE.L), the world’s largest spirits company, said it has proposed to increase its stake in Chinese baiju maker Sichuan Shujingfang Company to raise its stake to up to 60 percent through a partial tender offer.
Diageo offered 62 CNY ($9.50) per Sichuan share of Sichuan, the company said in a statement. It currently holds a 39.71 percent stake.
The British-based maker of Johnnie Walker Scotch and Smirnoff vodka offered close to a 25 percent premium to Sichuan’s closing price of 49.6 CNY on Monday.
Sichaun 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.
Sichaun said it would not be de-listed 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.
Diageo shares were down about 2 percent and ShuiJingFang shares were up about 2 percent.
Reporting by Sangameswaran S in Bengaluru and Martinne Geller in London; editing by Jason Neely