Diageo enters partnership in

RNS Number : 1365A

Diageo PLC

26 January 2011

 



26 January 2011

Diageo enters into strategic partnership agreement in Vietnam

Diageo, the world's leading premium drinks business, has entered into a strategic partnership agreement with Hanoi Liquor Joint Stock Company ("Halico") in Vietnam.  In addition, Diageo has agreed to acquire a 23.6% stake in Halico from VinaCapital Vietnam Opportunity Fund Limited, for approximately £33 million.

Halico is the largest domestic branded spirits producer in Vietnam.  The strategic partnership agreement with Halico represents a significant venture by Diageo into the fast growing Vietnamese branded spirits sector.  Halico is well-positioned to benefit from this growth given its significant distribution scale and recent investment in a new state of the art production facility.  As Halico's strategic partner, Diageo will assist Halico in enhancing its capabilities across a range of functions, including innovation, branding, supply, distribution and corporate relations.  In return, Diageo will become a long term equity investor in Halico and its main brand Vodka Hanoi. 

In parallel and separately, Diageo will continue to develop its international premium spirits portfolio, led by Johnnie Walker, Smirnoff and Baileys, through its wholly owned subsidiary Diageo Vietnam, Limited.

Mr Ho Van Hai, Director of Halico said, 'Halico has seen double digit growth in the last four years, but we are very keen to accelerate our development as Vietnam continues to offer attractive growth potential. Diageo is a great partner for us - they have experience working with large local industry players and have a reputation for building iconic brands. Their understanding of consumers and cultures in Asia and their commitment to this region gives us the confidence that, as a result of this partnership, we will take Halico and our brands to greater heights.'

Mr Gilbert Ghostine, President of Diageo Asia Pacific commented, 'Halico is Vietnam's number one local sprits company with the number one vodka brand, Vodka Hanoi. Their strong distribution and recent investment into their state of the art production facility speaks of their ambitions in this market. Diageo has many successful partnerships in Asia Pacific and partnerships are integral to the way we want to grow our business in this region.'

Diageo expects to complete the investment in Halico in its 2011 fiscal year, subject to customary conditions to completion.  In Diageo's financial statements, the 23.6% stake in Halico will be accounted for as an associate.

ENDS

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Editor notes

Diageo is  the world's  leading premium  drinks business  with a collection  of  beverage  alcohol  brands  across  spirits,  beer and wine. These brands include Johnnie Walker, Guinness, Smirnoff,  J&B, Baileys, Cuervo, Tanqueray and Captain Morgan. 

Diageo is a global company, with its products sold in more  than 180 countries around  the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE).  For more information about Diageo, its people, brands, and performance, visit www.diageo.com.

Halico, was founded in 1898 and is the largest domestic branded spirits producer in Vietnam.  The business produces and supplies spirits to a diverse range of customers across Vietnam.  Halico's main brand is Vodka Hanoi.  Hanoi Beverage Company is the largest shareholder of Halico, holding approximately 54% of its equity.

Forward-looking statements

This document contains 'forward-looking statements'. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. In particular, forward looking statements include all statements that express forecasts, expectations, plans, outlook and projections with respect to future matters, including trends in results of operations, margins, growth rates, overall market trends, the impact of interest or exchange rates, the availability or cost of financing to Diageo, anticipated cost savings or synergies, the completion of Diageo's strategic transactions and restructuring programmes, anticipated tax rates, expected cash payments, outcomes of litigation and general economic conditions. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements, including factors that are outside Diageo's control. All oral and written forward-looking statements made on or after the date of this document and attributable to Diageo are expressly qualified in their entirety by the 'risk factors' contained in Diageo's annual report on Form 20-F for the year ended 30 June 2010 filed with the US Securities and Exchange Commission ("SEC"). Any forward-looking statements made by or on behalf of Diageo speak only as of the date they are made. Diageo does not undertake to update forward-looking statements to reflect any changes in Diageo's expectations or any changes in events, conditions or circumstances on which any such statement is based. The reader should, however, consult any additional disclosures that Diageo may make in documents it publishes and/or files with the SEC.  All readers, wherever located, should take note of these disclosures. The information in this document does not constitute an offer to sell or an invitation to buy shares in Diageo plc or an invitation or inducement to engage in any other investment activities.  Past performance cannot be relied upon as a guide to future performance.

 

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