Diageo confirms equity aquis

Diageo PLC
26 January 2007

                                                                 26 January 2007

             Diageo confirms equity acquisition in Chinese business

In connection with its proposed acquisition of 43% of the equity of Sichuan
Chengdu Quanxing Group Co., Ltd., Diageo Highlands Holding B.V. has made a
formal announcement regarding the terms of the agreement to the Shanghai Stock
Exchange on 27 January 2007. Diageo plc accordingly makes the following
announcement to the London Stock Exchange:

Further to an equity interest transfer agreement dated 11 December 2006, as
amended on 23 December 2006, Diageo Highlands Holding B.V., a subsidiary of
Diageo plc, will acquire 43% of the equity of Sichuan Chengdu Quanxing Group
Co., Ltd. ('Quanxing') from Chengdu Yingsheng Investment Holding Co., Ltd.,
subject to certain closing conditions.

Quanxing holds 39.48% of the equity in Sichuan ShuiJingFang Joint Stock Co.,
Ltd. ('ShuiJingFang'), a leading maker of premium traditional Chinese liquor, or
baijiu. ShuiJingFang is listed on the Shanghai Stock Exchange. The agreed
purchase price for the 43% equity interest is RMB 517,194,200, which will be
funded from internal sources.

Diageo Highlands Holdings B.V. expects the transaction to complete shortly.

For further information contact:

Media Relations:

Jennifer Crowl           [phone]  [e-mail]

Investor Relations:

Sandra Moura             [phone]  [e-mail]



Notes to Editor:

Diageo is the world's leading premium drinks business.  With its global vision,
and local marketing focus, Diageo brings to consumers an outstanding collection
of beverage alcohol brands across the spirits, wine and beer categories
including Smirnoff, Guinness, Johnnie Walker, Baileys, J&B, Jose Cuervo,
Captain Morgan and Tanqueray, and Beaulieu Vineyard and Sterling Vineyards
wines.  Diageo trades in some 180 countries around the world and is listed on
both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE). For
more information about Diageo, its people, brands and performance, visit us at
www.diageo.com


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