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Diageo sells shareholding in Guinness Nigeria
Diageo has sold its shareholding in Guinness Nigeria to Singapore-based consumer goods conglomerate Tolaram, but will retain ownership of the Guinness brand.
The drinks giant, which produces brands including Johnnie Walker, Tanqueray and Baileys as well as Guinness, announced yesterday that it has entered a long-term partnership with Tolaram in Nigeria.
Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria PLC, a company listed on the Nigerian Stock Exchange, which produces and distributes Guinness in Nigeria, for a share price of 81.60 NGN per share, a 63% premium to the 30-day VWAP.
Diageo said the move was designed to “accelerate the growth of Guinness in Nigeria” in a press release. The company said it is creating a new model for Guinness in the African country, as well as its locally manufactured ready-to-drink (RTD) and mainstream spirits (MSS) products in the country.
Long-term license and royalty agreements with Tolaram have been agreed as part of the deal.
Diageo will retain ownership of the Guinness brand, and it will be licensed to Guinness Nigeria for the long-term, the company said.
The transaction between Diageo and Tolaram, which has been present in Nigeria for 50 years, is expected in fiscal 2025, subject to the satisfaction of certain conditions, including various regulatory approvals in Nigeria.
Dayalan Nayager, president Diageo Africa and chief commercial officer, said the move reflected Diageo’s “flexible, asset-light, beer operating model” which “is working well in other markets”.
As well as the Guinness brand, Guinness Nigeria will also continue to have rights to manufacture and distribute the other Diageo brands that it currently manufactures and distributes, including MSS. The spirits business is in the process of being separated into a new wholly owned Diageo spirits company, which the parent company has said will maximise growth.
Nayager added: “We’re also very excited about the future of our international premium spirits business in Nigeria, a vibrant country to which we remain deeply committed.”
Following completion of this transaction, Guinness Nigeria will remain listed on the Nigerian Stock Exchange and Tolaram intends to launch a mandatory takeover offer in compliance with local law requirements.