China’s sovereign wealth fund has acquired 1.1% of Diageo giving it a £221m stake in the drinks producer.
The move by China Investment Corp, which manages $200bn of the country’s $2,132bn in foreign exchange reserves, makes it Diageo’s ninth-largest investor.
CIC, which was formed in 2007, was initially criticised following early high-profile investments in Blackstone and Morgan Stanley, the US financial companies, that suffered large paper losses. Since then it has attempted to diversify its investments and holds a 0.5% cent stake in Tesco.
China has the world’s fastered growing alcoholic drinks market, with volumes forecast to improve by 17.6bn litres by 2014.
Diageo last year created a separate operating business to build its presence in China and is understood to expect China to rival the US as one of its most important markets by 2021.
Last month the company launched a vodka called Shanghai White in Hong Kong, made in a joint venture with the Sichuan Chengdu Quanxing group, the owner of the Shui Jing Fang baiju brand.
It also plans to extend distribution elsewhere in China.
