Diageo Pays $22M For Full Ownership In South African Brewer

Diageo Pays $22M For Full Ownership In South African Brewer

From Independent

Irish-listed drinks giant Diageo is paying $22m (€20m) to buy out the remaining 50pc interest of a drinks business which it did not already own.

The company, United National Breweries, is a brewer of sorghum beer, a traditional drink of the Zulu people which contains up to 8pc alcohol.

Diageo already owns half of the South African firm and is paying up to $36m to buy the remainder from its partner Pestello Investments with an initial payment of $22m and a potential earn-out payment of up to $14m.

Pestello Investments is owned by Indian businessman and politician Vijay Mallya. Mr Mallya, who primarily made his fortune in the liqour business, is one of India’s richest people with a net worth estimated at $750m.

The transaction is conditional on (among other things) consent from the South African competition authority and is expected to complete in this fiscal year.

Diageo, which owns internationally popular brands such as Guinness and Smirnoff, had already acquired a 50pc stake in United National Breweries at a reported cost of $36m in 2013.

A statement from Diageo said: “Once completed, this transaction will give Diageo control of the leading traditional sorghum beer business in South Africa, including the ability to make investment decisions to support the continued growth of United National Breweries brands in the sorghum beer category.”

Read more at Independent