(Yicai Global) Feb. 27 -- UK alcoholic beverage firm Diageo plans to raise its stake in Sichuan Swellfun to 70 percent from 60 percent, the well-known Chinese distiller announced late yesterday.

Grand Metropolitan International Holdings, an indirectly wholly-owned unit of London-based Diageo, which is the Chengdu-based firm's actual controller, plans to buy up to 488.5 million of its shares [SHA:600779] -- 10 percent of the total -- for CNY45 (USD6.73) each. 

The stocks' purchase price is 19.33 percent higher than their CNY37.71 closing price yesterday, the announcement noted, saying the acquisition will be worth up to CNY2.2 billion (USD329 million).

Chengdu-headquartered Swellfun's shares opened today at CNY41.38, then instantly hit the 10 percent limit up bourse rules impose to halt trading at CNY41.48.

London-based Diageo gained absolute control over Swellfun in August by splurging CNY6.1 billion (USD912.9 million) to lift its stake to 60 percent from 39.71 percent.

Swellfun's shares traded at CNY61.38 during the August acquisition, but the offer price this time is just CNY45 per as adjustments in the liquor sector weigh down.

Diageo kept adding to its holdings in Swellfun, nonetheless, likely because the liquor maker has been doing well and holds growth potential, Cai Xuefei, a spirit sector analyst, told Yicai Global, adding China's liquor field has embarked on a vintage era that Swellfun is poised to exploit as a venerable regional brand and, more importantly, Diageo remains optimistic about the growth potential of China's consumer goods.

Editor: Ben Armour