(Ecns.cn)—The China Securities Regulatory Commission (CSRC) has approved Diageo Plc (DGE), the world's largest liquor company, to buy the outstanding shares in Sichuan Shuijingfang Co. Ltd. as part of its acquisition of one of China's biggest white-spirit makers, according to the Beijing Times on Thursday.
The CSRC issued its approval for Diageo's mandatory tender offer for 60.3 percent of Shanghai-listed Shuijingfang on Tuesday. The offer was necessitated by Diageo taking majority control last year of Sichuan Chengdu Quanxing Group Company Ltd., which holds a 39.7 percent stake in Shuijingfang, according to Bloomberg Businessweek.
The amount payable if the offer is accepted by all shareholders will be about 6.3 billion yuan (US$996 million) with the offer price set at 21.45 yuan (US$3.39) a share, according to the reports.
On June 23, 2011, Diageo acquired an additional 4 percent stake in Quanxing Group from Chengdu Yingsheng Investment Holding Co. Ltd. and currently holds a 53 percent in Quanxing. Quangxing is the largest shareholder in Shuijingfang with a 39.7 percent stake.
The change of control over Quangxing requires Diageo to make a mandatory tender offer for the remaining 60.3 percent of outstanding shares in Shuijingfang.
In recent years Diageo has been chasing a greater percentage of sales from emerging markets compared with the U.S. and Europe, and its increasing stake in Quanxing last year was a sign that it seeks to expand its presence in China.
Diageo is working with Citic Securities Co., UBS AG and HSBC Holdings Plc on the tender offer, according to Bloomberg Businessweek.
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