Diageo, the world's leading distiller, will pay 51.6 million USD to acquire a 23.6 percent stake in Hanoi Liquor Joint Stock Co (Halico) currently held by VinaCapital's Vietnam Opportunity Fund.

The deal, to be completed by the end of June, would boost Daigeo's presence in Vietnam's growing drinks market, the company said.

"Halico's strong distribution and recent investment into their state-of-the-art production facility speak of their ambitions in this market," said Gilbert Ghostine, head of Diageo's Asia-Pacific division.

"Halico has seen double-digit growth for the past four years, but we are very keen to accelerate our development as Vietnam continues to offer attrative growth potential," said Halico director Ho Van Hai.

The two companies have also agreed to form a strategic partnership, under which Diageo would assist Halico in enhancing its capacities in innovation, branding and logistics.

However, Diageo would also continue to develop its spirits porfolio in Vietnam with such brands as Johnnie Walker, Smirnoff and Baileys distributed through its wholly-owned subsidiary, Diageo Vietnam Ltd.

"Diageo is a great partner for us – they have experience working with large local industry players and have a reputation for building iconic brands," Hai said.

Halico is the top domestic producer of branded spirits, with Vodka Hanoi its leading trademark, and Diaego's understanding of Asian consumers and culture and their commitment to the region would help lift Halico to greater heights, he added.

The company is looking towards Vietnam's trade negotiations with the EU, which could result in stronger exports of scotch whisky to that market, Hai said./.