Diageo Chinese ends offer little absorption

Bottles of Diageo cream whipped of Smirnoff (L) and ébouriffées Marshmallow flavored vodkas are visible in this photo taken on December 20, 2011.

Photo: Reuters/Mike Segar

LONDON | Wednesday, April 25, 2012 12: 18 pm EDT

London (Reuters) - the British Diageo (DGE.)(L) completed its bid for Chinese baijiu manufacturer of Sichuan Shuijingfang (600779.SS), he was forced to undertake, with negligible absorption and therefore remains as the largest shareholder in the Group of white spirits 4 not China.

The London-based Diageo has purchased a 4% in the joint venture of Sichuan Chengdu Quanxing last July to its participation at 53%, and under Chinese rules because Quanxing itself has a 39.7% in Shuijingfang, Diageo has been forced to launch a tender offer for all the remaining shares of Shuijingfang.

The manufacturer of Johnnie Walker whisky and vodka Smirnoff said he had no intention to seek full ownership of Shuijingfang that she saw the benefits to working with the Chinese shareholders and therefore define the mandatory offer at the minimum level that was unlikely to encourage any absorption.

Diageo said Wednesday it had now completed the issue with a nominal absorption of 0.001% of 60.3% shares not held by Quanxing. Diageo had fixed the yuan 21.45 offer apart, the minimum permitted by the rules of decision-making from the last closing price of total yuan and Chinese control.

The Chinese movement is part of Diageo strategy to increase the proportion of its sales in emerging markets to 50 per cent by 2015 at less than 40% currently. Chinese super premium white or baijiu spirits market, where Affairs of the Shuijingfang is focused, is one of the fastest growing spirits sectors of the world and an area in which Diageo is eager to develop.

(Statement of David Jones;) (Editing by Elaine Hardcastle)