Di­a­geo sus­pends plan to in­crease stake in Guin­ness Nige­ria

Financial Nigeria Magazine - - Finance -

Di­a­geo, a Bri­tish al­co­holic bev­er­age gi­ant, has can­celled its plan to in­crease its stake in Guin­ness Nige­ria due to the chal­leng­ing mar­ket con­di­tions in Nige­ria over the past year.

In Septem­ber 2015, Di­a­geo an­nounced that it had ap­proached the Board of Di­rec­tors of Guin­ness Nige­ria with a N41.37 bil­lion of­fer (worth $208 mil­lion at that time) to in­crease its con­trol­ling stake from 54.3 per cent to 70 per cent. How­ever, macroe­co­nomic con­di­tions in Nige­ria have fur­ther de­te­ri­o­rated since then. The coun­try has slipped into a re­ces­sion, in­fla­tion has spiked, and for­eign ex­change has be­come scarcer.

Fol­low­ing its de­ci­sion to can­cel its of­fer, Di­a­geo said it will now fo­cus on sup­port­ing Guin­ness Nige­ria, which re­ported a ful­lyear loss of N2.01 bil­lion ear­lier this month – the com­pany’s first loss in over 30 years.

“Di­a­geo has con­firmed that it main­tains a pos­i­tive out­look for Nige­ria in the longterm and it ex­pects the mar­ket to con­tinue to grow,” the com­pany said. “Nige­ria re­mains a key strate­gic mar­ket for Di­a­geo which re­mains sup­port­ive of Guin­ness Nige­ria . . . its board and man­age­ment and the ac­tions taken by Guin­ness Nige­ria to mit­i­gate the im­pact of chal­leng­ing mar­ket con­di­tions.”

Di­a­geo is the par­ent com­pany of Guin­ness Over­seas Limited and it pro­duces world-class brands such as John­nie Walker and Smirnoff, Bai­leys, among oth­ers.

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