Diageo has sold its shareholding in Guinness Nigeria PLC to the marketing and distribution conglomerate, Tolaram, giving the Singapore-based company a majority 58.02 per cent stake in Guinness Nigeria for N81.60 a share, amounting to N103.7 billion ($70 million), yesterday.

Under the new, long-term license and royalty agreements, Diageo said it is creating a new model for Guinness in Nigeria and its locally manufactured ready-to-drink (RTD) and mainstream spirits (MSS) products in the country. Tolaram has significant and extensive marketing and distributing operations and a 50-year presence in Nigeria.

In a statement by the company, Diageo said it will retain ownership of the Guinness brand and will be licensed to Guinness Nigeria for the long-term, enabling its continued growth and development in the country under the stewardship of Tolaram. “Diageo will also remain in the country through its wholly owned international premium spirits business built to serve a wider geographic reach across West Africa, with Nigeria as one of the main operational hubs.

Chief Executive Officer, Tolaram, Sajen Aswani, said that the new partnership with Diageo underscores their commitment to building on their strong presence and heritage in Nigeria, cultivated over decades of dedication and unwavering confidence in the future of Africa.

Board Chair, Guinness Nigeria, Omobola Johnson, said this represents a significant opportunity for the next phase of growth for Guinness Nigeria. Managing Director/Chief Executive Officer, Guinness Nigeria, Adebayo Alli, said he looks forward to working with Tolaram to build an enduring and sustainable business.

Following the completion of this transaction, Guinness Nigeria will remain listed on the Nigerian Stock Exchange (NSE) while Tolaram will launch a mandatory takeover offer in compliance with local law requirements.

Meanwhile, President Bola Tinubu has commended Tolaram Group for believing in Nigeria and having absolute faith in her economy. He said by acquiring Diageo’s shares in Guinness, Tolaram has shown that it has a long-term view of doing business in Nigeria. “President Tinubu welcomes Tolaram to the beverage sector of Nigeria’s business landscape and hopes the group’s business will continue to flourish.”

He assured investors and businesses that his government will continue to make the operating environment more conducive and transparent, adding that the multi-pronged reforms and interventions being implemented on the economic and financial fronts would deliver sustained growth and enduring profitability for investors.

This takeover does not come as a surprise to stakeholders as in October last year, the company announced that from April 2024, it will no longer import or distribute certain Diageo international premium spirits products, including Johnnie Walker, Singleton, and Baileys and others imported under its 2016 Sale & Distribution Agreement with Diageo plc.

Despite some increases in the price of products from last year till date, Guinness Nigeria has continued to suffer heavy losses, reporting an after-tax loss of N61.7 billion for the nine months ended March 31, 2024 from a profit of N5.9 billion in the same period of 2023. The brewer recorded 28 percent growth in revenue to N220.3 billion compared to N172.5 billion in the same period last year.

The company reported a loss-before-tax of N56 billion despite solid results on the top line. The topline growth was driven majorly by upward price adjustments as average product prices rose by 43 pe rcent YTD across the firm’s beer and mainstream spirit segments.