London, Jan 13, 2026, 08:31 GMT — Regular session
- Diageo shares gained roughly 2% in early London trading.
- Bloomberg reported the spirits group is considering various moves for its China operations, including a possible sale.
- Investors eye Feb. 25 interim results for hints on cash flow and debt levels.
Shares of Diageo climbed early Tuesday in London following a Bloomberg News report that the Johnnie Walker and Guinness producer is considering its options for its China operations, including potentially selling them. By 08:31 GMT, the stock had gained roughly 2%, reaching 1,708.5 pence.
The report arrives as investors look for clues that Diageo can steady growth after a tough stretch, with demand in China and the U.S. flagged as soft spots. In its latest quarterly update, Diageo highlighted a steep double-digit drop in Greater China, driven by Chinese white spirits. The company also revised its fiscal 2026 guidance lower, citing that weakness alongside a softer U.S. consumer outlook.
Portfolio shifts are now key to the narrative. Last December, Diageo struck a $2.3 billion deal to offload its 65% stake in East African Breweries to Japan’s Asahi. The agreement ensures Guinness and select spirits will still move through production and distribution channels, even as Diageo steps away from ownership.
Bloomberg’s report indicated the China review might lead to divestments. Shares in Sichuan Swellfun have dropped roughly 14% over the last year, putting the company’s valuation near $2.7 billion.
Diageo’s largest holding in China remains its controlling interest in Sichuan Shuijingfang, the baijiu producer known for Shui Jing Fang, through its Swellfun listing in Shanghai. The company previously reported owning about 63% of the stake.
European stocks edged up modestly early Tuesday as investors prepared for crucial U.S. inflation figures and upcoming corporate earnings reports. That cautious optimism lent some support to staple sectors, even as traders held back for new company updates.
Diageo revealed a modest insider purchase on Monday. Chair Sir John Manzoni acquired 397 ordinary shares at £16.49 apiece, according to a regulatory filing. The transaction was made under an arrangement with the company.
Talk of a China deal, however, carries caveats: asset sales often drag out, valuations can shift quickly in a soft market, and regulators could slow the process. Investors might also fret that offloading a strategic stake now could mean locking in a low if China demand bounces back later.
Diageo’s interim results on Feb. 25 mark the next major milestone. The company will provide updates on trading, cash flow, and leverage, with investors keen for any direct response to the China-asset report.
