Diageo sells 58% stake in Guinness Nigeria; joins multinationals exiting Africa’s 4th biggest economy
Diageo Plc is selling its stake in Guinness Nigeria Plc, joining other multinationals who are exiting or reducing their exposure to the West African nation that’s facing its worst cost-of-living crisis in decades.
UK-based Diageo will sell its 58% stake in Guinness Nigeria to Singapore-based Tolaram that operates in consumer goods and is also an investor in the nation’s new Lekki Deep Sea Port, for 81.6 naira ($0.05) apiece or about $70 million.
Unilever Plc, Procter & Gamble Co., GSK Plc and Sanofi in recent months have also announced they are either cutting back on their exposure or exiting Africa’s most populous nation.
Operating in Africa’s fourth biggest economy has become increasingly challenging because of a scarcity of dollars international businesses need to repatriate earnings. An almost 70% depreciation in the naira since June and decades-high inflation that are eroding profits and hurting consumer demand are also making it difficult.
As part of the deal, Diageo will enter into long-term license and royalty agreements with Tolaram for the continued production of the Guinness brand and its locally manufactured ready-to-drink and mainstream spirits brands, according to a statement from Guinness Nigeria.
The transaction is expected to be completed in fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria, according to the statement
Diageo will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long term and will remain in the country through its international premium spirits business.
