London, Jan 14, 2026, 09:39 GMT — Regular session
- Diageo shares slip in London after reports suggest the company is considering divesting from China
- Bloomberg reports the Guinness maker is considering selling its China assets, which include its stake in Swellfun
- Attention turns to management’s remarks and the interim results due on Feb. 25
Diageo shares slipped about 0.5% to around 1,656 pence on Wednesday, following reports that the spirits giant is considering various options for its China operations, including a potential sale. The London-listed stock took a modest hit amid the news. (MarketScreener)
Timing is crucial. Sir Dave Lewis stepped in as CEO on Jan. 1, amid investor demands for quicker growth and debt reduction, with the company flagging tougher market conditions ahead. “The market faces some headwinds but there are also significant opportunities,” Lewis said when Diageo announced his appointment. (Diageo)
Diageo’s stock has reacted sharply to any hints of a turnaround since it lowered its sales and profit forecasts back in November, pointing to weaker demand in major markets like the U.S. and China. “There’s much more for us to do, and we need to go faster,” interim CEO Nik Jhangiani said then. (Reuters)
Bloomberg News reported Tuesday that Diageo is weighing options, including selling its China assets, according to sources familiar with the situation. The review, involving Goldman Sachs and UBS, covers Diageo’s 63%+ stake in Shanghai-listed Sichuan Swellfun, a baijiu distributor. Diageo declined to comment. (Reuters)
The stock rose roughly 1% Tuesday amid swirling talk of China divestment, while European equities pulled back from record highs ahead of U.S. inflation numbers. (Reuters)
Investors are reevaluating China as part of a broader effort to streamline portfolios amid changing drinking habits. Demand across the country has been patchy, forcing premium spirits companies to fight tougher for both volume and pricing leverage.
RBC Capital Markets analyst James Edwardes Jones described Lewis’s November hiring as a “pleasant surprise” in a note. Meanwhile, Kai Lehmann, senior analyst at Flossbach von Storch, warned that the brands’ appeal “needs to be revitalised” amid ongoing structural challenges in the industry. (Reuters)
The key question remains which parts of its China business Diageo will hold onto and which it plans to offload — and at what valuation. A sale would also raise questions about how fast the company can convert those assets into cash, and whether that money will be used to pay down debt, fund buybacks, or invest in its brands.
But risks remain. Bloomberg reported the talks are still in early stages, and the deal could falter on valuation disputes, regulatory hurdles, or buyer interest. If Diageo pulls out, it stays vulnerable to China’s sluggish market. On the other hand, selling at too low a price might appear as a hasty retreat.
Diageo will report interim results on Feb. 25 for the half-year ending Dec. 31. Investors are keen to hear updates on China, U.S. demand, and the new CEO’s strategic focus. (Diageo)
