Diageo has sold its 58.02% shareholding in Guinness Nigeria Plc to Singapore-based consumer group Tolaram. This landmark deal, announced via the NGX website, sees Tolaram acquiring Diageo's stake at NGN 81.60 (USD 0.05) per share. The move is expected to reshape the local market landscape, with Tolaram taking on the production and distribution of the iconic Guinness brand and other Diageo products, including Johnnie Walker, Singleton, and Baileys.
This transaction is set to close in fiscal 2025, pending regulatory approvals, and includes long-term licensing and royalty agreements to ensure the continuity of these brands in Nigeria. Despite this change in ownership, Guinness Nigeria will retain the rights to manufacture and distribute the Guinness brand and other Diageo products it currently handles.
The sale comes amid a series of exits and reduced interests by multinational companies in Nigeria, driven by tough economic conditions. Diageo’s move follows similar actions by other global companies facing challenges in the Nigerian market. For instance, Heineken Brouwerijen B.V. has been restructuring its operations, including selling its stake in Champion Breweries and acquiring an 80% stake in Distell Wines and Spirits Nigeria Limited. Moreover, companies like Kimberly-Clark and GlaxoSmithKline (GSK) have also cited economic difficulties as reasons for their departure from the Nigerian market.
Guinness Nigeria has faced significant financial hurdles, reporting a loss after tax of NGN 61.7 billion (USD 41m) for the nine months ending March 31, 2024, a stark contrast to a NGN 5.9 billion (USD 3.9m) profit in the same period the previous year. The company’s financial strain includes substantial foreign exchange losses and increased interest expenses, leading to negative equity. However, Guinness Nigeria remains optimistic about its future, focusing on innovation and operational excellence to navigate these challenges.
Tolaram’s acquisition represents a strategic expansion in Nigeria, leveraging its extensive distribution and manufacturing capabilities to enhance value delivery to customers and shareholders.
Omobola Johnson, Board Chair of Guinness Nigeria, hailed the partnership, noting that it combines Tolaram’s expertise in manufacturing and distribution with Diageo’s brand-building prowess.
Adebayo Alli, Managing Director and CEO of Guinness Nigeria, expressed enthusiasm for the collaboration, citing Tolaram’s alignment with the company’s values and commitment to sustainability.
