Introduction
In a strategic move to enhance the growth of Guinness in Nigeria, Diageo has sold its shareholding in Guinness Nigeria PLC to Tolaram, a prominent conglomerate specializing in manufacturing, marketing, and distribution. This new long-term partnership aims to create a robust framework for the continued expansion and development of the Guinness brand in Nigeria.
Strategic Partnership with Tolaram
Diageo is establishing a new model for Guinness and its locally manufactured ready-to-drink (RTD) and mainstream spirits (MSS) products in Nigeria. By partnering with Tolaram under long-term license and royalty agreements, Diageo aims to accelerate the growth of Guinness in the country. Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria PLC at 81.60 NGN per share, a 63% premium to the 30-day VWAP.
Tolaram’s Market Presence
Tolaram boasts extensive operations and a 50-year presence in Nigeria, making it an ideal partner for Diageo. With this partnership, Tolaram will support the local manufacturing and distribution of Guinness and other Diageo brands currently produced in Nigeria, ensuring the continued growth and development of these products.
Continued Commitment to Nigeria
Diageo remains deeply committed to Nigeria. While selling its shareholding, Diageo will retain ownership of the Guinness brand, licensing it to Guinness Nigeria for the long term. This arrangement allows Diageo to maintain control over the brand’s marketing and strategic direction while benefiting from Tolaram’s local expertise.
Expanding International Premium Spirits
Diageo will continue its presence in Nigeria through its wholly owned international premium spirits business, serving a wider geographic reach across West Africa with Nigeria as a key operational hub. This strategy aligns with Diageo’s goal of maximizing growth through a flexible and asset-light operating model.
Transaction Details and Future Plans
The completion of the transaction is expected in Fiscal 2025, pending the satisfaction of various conditions, including regulatory approvals in Nigeria. Once finalized, Tolaram will manage the day-to-day operations of Guinness Nigeria, leveraging its strong market presence to drive efficiency and growth.
Under the new partnership, Guinness Nigeria will continue to manufacture and distribute other Diageo brands, including MSS. This continuity ensures that the product portfolio remains robust, supporting the overall growth strategy.
Comments from Leadership
Debra Crew, Diageo CEO
“I’m excited to announce our new partnership with Tolaram. Guinness has been Nigeria’s favorite beer for nearly 75 years. Tolaram shares this passion for Guinness and for Nigeria, making them the perfect partners as we continue to grow our business and seek to delight even more consumers in the country.”
Dayalan Nayager, President Diageo Africa and Chief Commercial Officer
“Guinness is one of Diageo’s most iconic brands and holds a special place in the hearts of Nigerian consumers. Our flexible, asset-light, beer operating model is working well in other markets, and we will unlock the full potential of Guinness in Nigeria with our new, long-term partner Tolaram. We’re also very excited about the future of our international premium spirits business in Nigeria, a vibrant country to which we remain deeply committed.”
Sajen Aswani, Chief Executive, Tolaram
“Our partnership with Diageo to jointly grow Guinness Nigeria underscores our commitment to build on our strong presence and heritage in Nigeria, cultivated over decades of dedication and unwavering confidence in the future of Africa. We take a long-term view on all our investments and this partnership reflects our optimism on the exciting opportunities that lie ahead across the continent.”
Haresh Aswani, Managing Director, Tolaram Africa
“The acquisition of Guinness Nigeria marks a pivotal moment in Tolaram's journey of growth and diversification. We are thrilled to welcome a company with such a rich legacy and strong consumer loyalty into our ecosystem. This strategic move not only expands our footprint in the Nigerian market but also presents an opportunity to leverage our combined strengths to foster innovation and deliver immense value to our customers and stakeholders across the nation.”
Following the completion of this transaction, Guinness Nigeria will remain listed on the Nigerian Stock Exchange, and Tolaram plans to launch a mandatory takeover offer in compliance with local law requirements. This new partnership framework is expected to provide a solid platform for Guinness' continued expansion in Nigeria, supporting investment in manufacturing and distribution capabilities while driving greater efficiency and growth.
A Strategic Step Forward
This move builds on Diageo’s commitment to an efficient operating model in West Africa, ensuring long-term sustainable growth. With Nigeria as a major operational hub, Diageo's strategy will strengthen its international premium spirits business and extend its market reach across the region.
