By Agency Report
Diageo, the foreign majority shareholder in Guinness Nigeria Plc, has agreed to sell its controlling equity stake of 58.02 per cent to Tolaram, a Singaporean multinational.
Under the terms of an agreement signed on Tuesday, Tolaram will acquire Diageo’s 58.02 per cent shareholding in Guinness Nigeria and enter into long-term license and royalty agreements for the continued production of the Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits
brands.
By acquiring 58.02 per cent, Tolaram will also undertake a mandatory tender offer to seek to acquire shares held by minority shareholders, in a transaction that could increase the new core investor’s controlling stake.
Guinness made this known in a press release on the NGX.
“Diageo remains deeply committed to Nigeria and will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long-term, enabling the next phase of growth and development of Guinness
Nigeria under the stewardship of Tolaram,” Guinness Nigeria stated.
The announcement is the latest in a string of major multinational organizations exiting the country citing tough economic challenges.
The purchase, slated to be completed in fiscal 2025 assuming regulatory clearances, will also see Tolaram enter into long-term license and royalty agreements to continue producing the legendary Guinness brand alongside Diageo’s ready-to-drink and mainstream spirits locally.
Based on its current share price of N50.5 per share, Guinness has a market value of N110.7 billion, indicating that the acquisition might surpass N64 billion.
According to the company, this move aligns with Diageo’s strategic vision to retain brand influence while leveraging Tolaram’s extensive distribution and manufacturing capabilities.
The acquisition also marks a significant expansion of Tolaram’s footprint in Nigeria, promising enhanced innovation and value delivery to customers and shareholders.
Board Chair of Guinness Nigeria, Omobola Johnson, reacting to the deal said, “This partnership brings together Tolaram’s deep expertise in manufacturing and distribution with Diageo’s exceptional brand-building and innovation capabilities. It positions Guinness Nigeria for robust growth in this dynamic market.” (Pieced together from reports by The Nation and Nigerian Tribune)
Credit: News Express NG
