Diageo has sold its 58.02% shareholding in Guinness Nigeria, a publicly-listed company, to Singapore-based consumer group Tolaram. The transaction was executed at a share price of N81.60 ($0.05) per share.
Despite the sale, Guinness Nigeria will retain the rights to manufacture and distribute the Guinness brand along with other Diageo brands currently in its portfolio, such as Johnnie Walker, Singleton, and Baileys. This move allows Guinness Nigeria to continue its operations while benefiting from the strategic support of its new majority stakeholder, Tolaram.
Diageo said it is creating a “new model for Guinness in Nigeria” and its locally manufactured ready-to-drink and mainstream spirits products in the country partnering with Tolaram, under new, long-term license and royalty agreements.
The London-listed group said the “transaction is consistent with Diageo’s strategy to operate a flexible and asset-light beer operating model”.
Following completion of this transaction, Guinness Nigeria will remain listed on the Nigerian Exchange Limited and, subject to regulatory approvals, Tolaram intends to launch a mandatory takeover offer in compliance with local law requirements. This means it will make an offer to buy shares held by other investors aside Diageo.
Tolaram’s business venture include Dufil Prima Foods, a joint venture with Indofood and Kellogg’s (which produces indomie and minimie noodles, power pasta and power oil), Lucky Fibres (which produces Nobel Carpets and lush hair) and TG Arla Dairy Products, a joint venture with Danish firm, Arla Foods, which imports and packages Dano milk in Nigeria.
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