By Andrea Figueras

Diageo will sell its stake in subsidiary Guinness Nigeria to Singapore-based marketing and distribution conglomerate Tolaram, as part of a shift in its business model in the country.

Tolaram will acquire a majority 58.02% stake in Guinness Nigeria for 81.60 Nigerian naira a share, or around NGN103.7 billion ($70 million), while entering into a long-term partnership with the London-based maker of Johnnie Walker Scotch whisky.

Under the new license and royalty agreement, Guinness Nigeria will continue to have rights to manufacture and distribute Guinness as well as other brands, including mainstream spirits, the U.K. company said Tuesday.

Following the transaction--expected to be completed in fiscal 2025 subject to regulatory approvals--Guinness Nigeria will remain listed on the Nigerian Stock Exchange and Tolaram intends to launch a mandatory takeover offer in compliance with local law requirements.

The deal aligns with Diageo's plan to select the most appropriate structure and route-to-market for Guinness, based on local conditions, while retaining ownership of the brand, it said. The company will continue to drive the brand and marketing strategy of Guinness in the country, in partnership with Tolaram and Guinness Nigeria.

In October last year, Diageo decided to establish a wholly owned spirits-focused business to manage the importation and distribution of its international premium spirits portfolio in West and Central Africa, with Nigeria as one of the hubs.

As a result, the U.K. company terminated the license agreement with Guinness Nigeria for the distribution of products including Johnnie Walker, Singleton, and Baileys.

The subsidiary continued to manufacture and distribute ready-to-drink brands and locally produced spirits, including inter-alia Orijin, Captain Morgan Gold, Gordon's Moringa, and Smirnoff X1 Choco.

Write to Andrea Figueras at

(END) Dow Jones Newswires

06-11-24 1019ET