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Diageo divests majority stake in Guinness Nigeria to Tolaram
Rafaela Sousa

Rafaela Sousa

12 June 2024

Diageo divests majority stake in Guinness Nigeria to Tolaram

Diageo has unveiled a long-term partnership with Singapore-based consumer packaged goods company Tolaram in Nigeria.


Diageo announced yesterday (11 June) that Tolaram is set to acquire a 58.02% stake in Guinness Nigeria for a share price of NGN 81.60 (approx. $0.05) per share.


Diageo said the move is to "accelerate the growth of Guinness in Nigeria". The drinks giant also mentioned that it is establishing a new model for Guinness in the African nation and for its locally produced ready-to-drink and mainstream spirits (MSS) products.


Guinness Nigeria is anticipated to expand under Tolaram's majority ownership through newly established long-term licensing and royalty arrangements.


In addition to the Guinness brand, Guinness Nigeria will continue to have the rights to manufacture and distribute other Diageo brands it currently handles, including MSS. Diageo is in the process of being separated into a new wholly-owned spirits company, which will help maximise growth.


This transaction aligns with Diageo’s strategy to maintain a 'flexible and asset-light beer operating model,' said the spirits business. It enables the company to choose the most suitable structure and market route for Guinness based on local conditions while still retaining ownership of the Guinness brand.


Diageo will continue to drive the brand and marketing strategy of Guinness in Nigeria, collaborating with Guinness Nigeria and Tolaram. This partnership aims to sustain Diageo’s abilities in brand building and innovation, fostering long-term growth for Guinness in the country.


The transaction, along with the new long-term partnership model, establishes a sturdy platform for Guinness’ ongoing expansion in Nigeria. It bolsters investment in both manufacturing and distribution capabilities, fostering enhanced efficiency and growth.


Dayalan Nayager, president and chief commercial officer of Diageo Africa, said: “Guinness is one of Diageo’s most iconic brands and holds a special place in the hearts of Nigerian consumers. Our flexible, asset-light, beer operating model is working well in other markets, and we will unlock the full potential of Guinness in Nigeria with our new, long-term partner Tolaram."


"We’re also very excited about the future of our international premium spirits business in Nigeria, a vibrant country to which we remain deeply committed.”


Sajen Aswani, CEO of Tolaram, added: “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. We take a long-term view on all our investments and this partnership reflects our optimism on the exciting opportunities that lie ahead across the continent.”


Haresh Aswani, managing director for Tolaram Africa, commented: “The acquisition of Guinness Nigeria marks a pivotal moment in Tolaram's journey of growth and diversification. We are thrilled to welcome a company with such a rich legacy and strong consumer loyalty into our ecosystem. This strategic move not only expands our footprint in the Nigerian market but also presents an opportunity to leverage our combined strengths to foster innovation and deliver immense value to our customers and stakeholders across the nation”.


After the completion of this transaction, Guinness Nigeria will retain its listing on the Nigerian Stock Exchange. Additionally, Tolaram plans to initiate a mandatory takeover offer in adherence to local law requirements.


#Diageo #Guinness #Nigeria

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