Diageo Makes $208M Offer For A Bigger Stake In Guinness Nigeria

Diageo Makes $208M Offer For A Bigger Stake In Guinness Nigeria

Diageo, the maker of Guinness beer and Johnnie Walker whisky, has offered about $208 million to buy more stake in Guinness Nigeria, a listed firm that houses Diageo’s brands in the populous west African nation.

Diageo, which already hold a 54.3 percent stake in Nigerian company, want to increased its shareholding to 70 percent. The Wall Street Journal reported. It offered to buy shares in the Nigerian Stock Exchange-listed firm at 175 naira each, or a 40 percent premium.

The world largest spirit maker is on an expansion across Africa as it seeks to increase its business on the continent, which is expected to have the highest growth in the alcohol business in the long term driven by a youthful population.

According to a Reuters report, fund managers are abandoning infrastructure investments in sub-Saharan Africa for better return in the beer market, where youthful drinkers are making it profitable to invest in local breweries.

International spirit companies coming into Africa are targeting even the poorest consumers in urban and rural areas with liquors made locally and sold at dirty-cheap prices.

In July, Diageo said it will terminate its partnership with Heineken in South Africa and Namibia three years ahead of schedule, as it moved to grow the business on its own.