Diageo, the renowned maker of Johnnie Walker whisky, has announced the sale of its 58.02% shareholding in Guinness Nigeria to Singapore-based consumer group Tolaram. The sale price was set at N81.60 ($0.05) per share.
Despite the change in ownership, Guinness Nigeria will maintain its rights to manufacture and distribute Guinness, as well as other Diageo brands, including Johnnie Walker, Singleton, and Baileys.
Diageo emphasized that the deal aligns with its strategy to adopt a flexible and asset-light beer operating model, particularly in the Nigerian market.
In a statement, Diageo CEO Debra Crew expressed enthusiasm about the partnership with Tolaram, highlighting the shared passion for Guinness and the Nigerian market.
Crew noted, “Guinness has been Nigeria’s favourite beer for nearly 75 years. Tolaram shares this passion for Guinness and for Nigeria, making them the perfect partners as we continue to grow our business and seek to delight even more consumers in the country.”
The transaction is expected to be finalized in Diageo’s fiscal year 2025, contingent upon the fulfilment of certain conditions, including regulatory approvals in Nigeria.
Tolaram, founded in 1948, operates across Africa, Asia, and Europe. In Nigeria, it has established joint ventures with multinational companies like Indofood, Kellanova, Dano, and Colgate-Palmolive.
Sajen Aswani, Tolaram’s CEO, highlighted the company’s long-standing presence in Nigeria and its commitment to future growth, stating, “Our partnership with Diageo to jointly grow Guinness Nigeria underscores our commitment to build on our strong presence and heritage in Nigeria, cultivated over decades of dedication and unwavering confidence in the future of Africa.”
The deal comes at a challenging time for businesses in Nigeria, which has faced significant economic hurdles. For the nine months ending March 31, 2024, Guinness Nigeria reported a 28% increase in revenue to N220.3 billion and a 27% rise in operating profit to N22.21 billion.
However, the company also recorded unrealized forex losses of N81 billion, primarily due to the devaluation of the Naira. Other companies, such as Nigerian Breweries, have also struggled, with plans to suspend production at two of its nine plants after posting a loss of N106 billion in 2023.
Diageo had initially planned to set up a wholly-owned subsidiary for some of its spirits brands in Nigeria by 2025.
In the meantime, Diageo has announced that it will no longer use Guinness Nigeria to import and distribute its premium spirits as of October.
Meanwhile, Transcorp Hotels Plc, led by Managing Director/Chief Executive Officer Dupe Olusola, has revealed its ambitious plans for expansion across Nigeria and into other African countries.
The announcement follows the company’s recent divestment of its stake in Transcorp Hotels Calabar Limited.
Olusola emphasized the company’s focus on expansion, aiming to establish a more substantial presence in the hospitality industry in Abuja, throughout Nigeria, and eventually across Africa.
