All We Know About Guinness Plans to Leave Nigeria After Several Years Of Operations

Diageo, the parent company of Guinness has announced its exit from the Nigerian market after operating in the country for many years.

This was gathered after the company agreed to sell its 58.02% majority stake in Guinness Nigeria to the Singaporean conglomerate, Tolaram Group.

The decision comes as Guinness Nigeria reported a staggering loss of N61.9 billion after-tax between July 2023 and March 2024, attributed to the challenging economic climate in Nigeria.

This loss is a significant decline from the N5.9 billion profit recorded in the same period last year, representing a 1,000% decrease.

The sale is expected to be completed in fiscal 2025, subject to obtaining the necessary regulatory approvals in Nigeria.

As part of the agreement, Tolaram will acquire the majority stake in Guinness Nigeria and enter into long-term licensing agreements for the continued production of Guinness and other Diageo brands in Nigeria.

All We Know About Guinness Plans to Leave Nigeria After Several Years of Operations

Diageo will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long term.

This move allows Diageo to maintain its brand presence in Nigeria while exiting the market.

Updating the Nigerian Exchange Group of recent developments within the bank, Diageo's Company's Secretary, Abidemi Ademola, said the terms of an agreement for the acquisition of the shares by Tolaram was signed today, June 11, 2024.

"Tolaram will acquire Diageo's 58.02% shareholding in Guinness Nigeria and enter into long-term license and 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 during Fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria," Ademola said.

Ademola said Diageo remained deeply committed to Nigeria and would retain ownership of the Guinness brand, which would be licensed to Guinness Nigeria for the long term, enabling the next phase of growth and development of Guinness Nigeria under the stewardship of Tolaram.

"In partnership with Guinness Nigeria and Tolaram, Diageo will continue to drive the brand and marketing strategy for Guinness in Nigeria, to ensure Diageo's exceptional capabilities in brand building and innovation continue to drive long-term growth for Guinness in Nigeria."

Ademola said following completion of this transaction, Guinness Nigeria would remain listed on the Nigerian Exchange Ltd. and, subject to regulatory approvals, Tolaram has plans to launch a mandatory takeover offer in compliance with local law requirements.

Board Chair of Guinness Nigeria, Omobola Johnson, said, "Today's announcement represents a significant opportunity for the next phase of growth for Guinness Nigeria.

This partnership brings together Tolaram's deep expertise in manufacturing and distribution, and Diageo's exceptional capabilities in brand building and innovation. I believe this is a winning combination which leaves Guinness Nigeria extremely well placed to drive further growth in this market."

Managing Director of Guinness Nigeria, Adebayo Alli, 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".

Also, Tolaram Africa's Managing Director, Haresh Aswani, 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 Nigeria, a public limited liability company quoted on the Nigerian Stock Exchange, was incorporated on April 29, 1950, as a trading company importing Guinness Stout from Dublin.

The Guinness brand has operated in Nigeria since 1950, and with Tolaram's controlling stake acquisition, the global brewery brand will have spent 75 years in Nigeria.

Diageo's exit from Nigeria adds to the list of multinational companies that have left the country in recent years, citing the harsh economic climate as making business unprofitable. Other companies that have exited Nigeria include GlaxoSmithKline and Microsoft.