Why Is Diageo Stock Rising Premarket Today?

• Diageo is trimming costs and selling global holdings amid a pullback in alcohol demand that is pressuring the business.
• According to Bloomberg, the British group is working with advisors to sell its 63% stake in Sichuan Swellfun Co., a Shanghai-listed company.
• DEO stock is up by over 5% so far this year, after years in decline.

British liquor giant Diageo Plc is exploring options for its China assets, including a potential sale, as part of broader portfolio rebalancing amid tariff pressures and shifting drinking habits, Bloomberg reported.

Diageo, known for Johnnie Walker whiskey and Smirnoff vodka, is working with Goldman Sachs and UBS Group to review its operations, which include a more than 63% stake in Shanghai-listed Sichuan Swellfun Co., the report said, citing anonymous sources. 

U.S.-listed shares of Diageo rose nearly 1% in early premarket trading on Tuesday, following the report. 

Firms Review China Exposure

If the talks materialize in a divestiture, Diageo would be the latest global company to partially or fully exit China.

Last year, Starbucks sold a majority stake in its China business to private equity firm Boyu Capital for $4 billion, while Restaurant Brands International made a similar move with the local unit of its Burger King chain. 

Declining Alcohol Consumption 

The company cut its sales and profit outlook in November amid declining consumer alcohol consumption, particularly in key markets such as the U.S. and China. 

Diageo has responded by cutting costs and selling its global holdings. In December, it agreed to sell a majority stake in East African Breweries to Japan’s Asahi Group Holdings Ltd. for $2.3 billion. Meanwhile, the company appointed former Tesco boss Dave Lewis as its CEO in November, after a months-long search.

Diageo stock declined 32% over 2025, its fourth straight year of decline. Shares are up 5.4% so far this month.

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