Ghana: Diageo Sells Guinness Ghana to Castel Group

Diageo has announced the sale of its 80.4% stake in Guinness Ghana Breweries to French wine and brewing company Castel Group for USD 81 million. This move comes just days after Diageo dismissed speculation that it was considering selling the entire Guinness brand.

Despite the divestment, Diageo will retain ownership of the Guinness brand and continue to drive its marketing and strategy in Ghana through a licensing and royalty agreement with Guinness Ghana. Other Diageo brands currently produced by Guinness Ghana, including Malta, Orijin, Smirnoff Ice, and Alvaro, will also be licensed under the new agreement.

This sale is part of Diageo's broader strategy to transition to an "asset-light" business model in Africa, a shift aimed at reducing exposure to currency and economic volatility in the region. Over recent years, Diageo has been steadily divesting its African brewing operations. The company previously sold Guinness Cameroon to Castel for GBP 389 million (USD 468m) (inside.beer, 14.07.2022) and its 58% stake in Guinness Nigeria to Singaporean conglomerate Tolaram for NGN 103 billion (USD 70 million) (inside.beer, 12.06.2024). Additionally, in December 2023, Diageo sold Ethiopia’s Meta Abo Brewery to Castel (inside.beer, 25.01.2022).

Diageo’s share price has been under pressure, having declined 12% year-to-date, following a profit warning last year linked to slowing sales in Latin America. Investor concerns over declining alcohol consumption post-pandemic and the potential impact of weight-loss drugs on the sector have also affected sentiment.

Castel CEO Gregory Clerc welcomed the acquisition, stating, "This marks a new milestone in our growth ambition and reaffirms our confidence in Africa’s potential." Meanwhile, Diageo Africa President Dayalan Nayager emphasized that Guinness will continue to thrive in Ghana, benefiting from Castel's strong distribution network.

Following the completion of regulatory approvals, Guinness Ghana will remain listed on the Ghana Stock Exchange, ensuring its continued local presence despite the ownership change.

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