Diageo Plc (DGE), the maker of Johnnie Walker Scotch whisky, will consider acquisitions in countries including China and may list its shares in Asia in coming years, Chief Executive Officer Paul Walsh said.
Diageo’s first priority is expanding its existing brands, though it will consider purchases, Walsh said today in an interview on Bloomberg Television in Singapore. The spirits maker is open to all options for an Asian listing and has enough cash to buy companies, the CEO said in a separate interview.
Asian markets continue to grow, and Diageo’s business will keep expanding even if the world economy experiences a “double dip” into recession, Walsh said. The U.S. market is also expanding amid financial turbulence, he said. Diageo last month reported a 5 percent increase in full-year organic operating profit as increased sales of whiskies such as Johnnie Walker in emerging markets offset a slide in Europe.
“If we see opportunity, we will acquire,” Walsh said. “The priority is to grow what we already own.”
Chief Financial Officer Deirdre Mahlan said Aug. 25 that the distiller’s “strong balance sheet” enables it to look for acquisition opportunities in emerging markets. The London-based company completed the acquisition of Turkey’s Mey Alkollu Ickiler Sanayi & Ticaret AS last month, adding spirits including Yeni Raki.
Diageo has said it’s interested in buying Jose Cuervo, the world’s biggest tequila brand, if it’s for sale. The Beam liquor division of competitor Fortune Brands Inc. said Sept. 14 that it’s also prepared to make large acquisitions.
Diageo, which has been reducing costs through measures such as trimming the workforce in Scotland, doesn’t need further restructuring, Walsh said today.
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