Tolaram Buys Guinness Nigeria From Diageo as Company Reports N56bn Loss, Addresses Exiting Country
- Tolaram has agreed to buy Diageo's 58.02% ownership of Guinness Nigeria and to establish long-term licensing and royalty agreements
- This means the new buyer will continue producing Guinness major spirits brands and locally-made Diageo ready-to-drink
- The transaction is expected to be completed in Fiscal 2025, subject to obtaining all necessary regulatory clearances in Nigeria
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Tolaram has entered into an agreement to purchase Diageo's 58.02% stake in Guinness Nigeria and enter into long-term license and royalty arrangements.
Source: Getty Images
This will allow it to maintain the production of the Guinness brand as well as its locally produced Diageo ready-to-drink and mainstream spirits brands.
Under the terms of an agreement signed on June 11, the transaction is anticipated to be finalised in Fiscal 2025, provided that all regulatory clearances are obtained in Nigeria.
The development came after Guinness recently announced a record loss for its first quarter of the year. Report showed that the company reported a N56 billion loss in three months in spite of increase in revenue year-on-year.
Guinness to continue expanding under Tolaram
According to a disclosure posted on the Nigerian Exchange, the Guinness brand will continue to be owned by Diageo and licensed to Guinness Nigeria for an extended period of time, allowing Guinness Nigeria to continue expanding under Tolaram's direction.
In order to guarantee that Diageo's remarkable skills in brand building and innovation continue to drive long-term growth for Guinness in Nigeria, the company will continue to lead the brand and marketing strategy for Guinness in Nigeria in collaboration with Guinness Nigeria and Tolaram.
After this transaction is finished, Guinness Nigeria will continue to be listed on the Nigerian Exchange. Tolaram plans to initiate a mandatory takeover offer, pending regulatory permission, in accordance with local legal requirements.
Adebayo Alli, Managing Director/Chief Executive Officer, Guinness Nigeria, said:
“Today’s announcement marks an exciting moment for Guinness Nigeria, our employees and our customers. I look forward to working alongside Tolaram, which is one of the largest and most respected consumer goods companies in Africa, and I am pleased to note Tolaram’s alignment with Guinness Nigeria’s values and its strong commitment to build an enduring and sustainable business”.
Haresh Aswani, Managing Director, Tolaram Africa, said:
“We are thrilled to welcome Guinness Nigeria, a company with such a rich legacy and strong consumer loyalty, into our ecosystem. This strategic move will expand our significant footprint in the Nigerian market and presents an opportunity to leverage our combined strengths to foster innovation and deliver immense value to our customers and shareholders across the nation.”
Guinness announces price increase for malts, others
Legit.ng reported that Guinness Nigeria Plc has announced that it is implementing new prices across significant product lines.
This followed a similar announcement by Nigerian Breweries Plc to effect another increase in the price of its products in an announcement by the company to customers.
It explained that the upward review became necessary considering the continued rising output witnessed in the country.
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Source: Legit.ng
