CHENGDU -- China's regulatory body has approved British drink giant Diageo's acquisition of additional shares to become the controlling shareholder of one of the best-known Chinese liquor brands.
The Ministry of Commerce approved the transfer of shares of four percent from Quanxing Group to Diageo last Thursday, bringing Diageo's holding in Quanxing to 53 percent, sources from Quanxing said Monday.
Quanxing, based in southwest Sichuan province, is the largest shareholder of Sichuan Shuijingfang Co, which produces the well-known Shuijingfang white spirits.
Diageo says it is now seeking approval from the China Securities Regulatory Commission to launch the required mandatory tender offer in accordance with Chinese takeover regulations.
Once the offer was accepted by other Shuijingfang shareholders, Diageo agreed to pay a maximum amount of 6.3 billion yuan ($969 million) for the deal, the company said in a statement posted on its website.
Diageo acquired 43 percent of Quanxing in February 2007 and boosted its stake to 49 percent in July 2008. The additional 4-percent share transfer has been seen as a landmark move, as industry experts expect the takeover will help Chinese white spirits gain an international reputation.
