Diageo Plans $200 Million Increase to Guinness Nigeria Stake
Diageo Plc, the world’s biggest distiller, is considering raising its majority stake in brewer Guinness Nigeria Plc to 70 percent, a deal that could cost the company more than $200 million.
The maker of Johnnie Walker whisky and Smirnoff vodka plans to make a tender offer of 175 naira a share to raise its shareholding from 54.3 percent, Lagos, Nigeria-based Guinness Nigeria said in a statement on Wednesday. That would require payment of 41.38 billion naira ($208 million), according to Bloomberg calculations. Guinness Nigeria shares gained 5 percent to 131.48 naira as of 1 p.m. in Lagos, valuing the brewer at 198 billion naira.
Diageo, based in London, wants to get 20 percent of its sales from Africa after investing more than $1 billion in the continent over the last five years, Chief Executive Officer Ivan Menezes told Bloomberg in February. The company declined to comment further when contacted on Wednesday.
Guinness Nigeria, the country’s second biggest brewer, said Sept. 7 that full-year profit fell 19 percent as weaker economic growth in the continent’s most populous country hurt sales of pricier beer brands. Nigeria is suffering from lower crude prices, with government revenues declining and public sector workers going unpaid for months. Source: Bloomberg