Business
Majority Shareholder Exits, Dumps Stake In Guinness Nigeria
By Gideon Ayeni
In a significant development, Guinness Nigeria Plc, a subsidiary of Diageo, has announced its exit from the Nigerian market after operating in the country for 75 years. The company has agreed to sell its 58.02% controlling shares to Singaporean conglomerate Tolaram Group, citing the harsh economic climate and significant financial losses.
The announcement comes after Guinness Nigeria recorded a staggering loss of N61.9 billion after tax between July 2023 and March 2024, a 1,000% decrease from the N5.9 billion profit generated in the same period last year. The loss was attributed to the naira’s continued downward trend and the economic challenges faced by the company.
Under the terms of the agreement of the exit, Tolaram will acquire Diageo’s majority stake in Guinness Nigeria, including royalty agreements for the continued production of the Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands. The transaction is expected to be completed by 2025, subject to regulatory approvals.
Diageo has clarified that the sale of its Nigerian brand will not affect its ownership of the Guinness global brand, which will be licensed to Guinness Nigeria for the long term. The exit of Diageo from Guinness Nigeria adds to the growing list of multinational companies, including GlaxoSmithKline and Microsoft, that have left the country in recent years due to the challenging economic environment.
Guinness Nigeria was incorporated in 1950 as a trading company importing Guinness Stout from Dublin and has since become a household name in Nigeria. The company’s popular brands include Smirnoff Ice, Smirnoff Vodka, Orijin Bitters, Malta Guinness, Gordons Orange Sunset, and Dubic Malt.
The exit of Guinness Nigeria marks a significant shift in the country’s business landscape and raises concerns about the impact of economic policies on foreign investment and job security.
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