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Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria - Business - Nairaland

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Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by nlfpmod: 1:00pm On Jun 11
In a landmark deal set to reshape Nigeria’s beverage market, Tolaram has agreed to acquire Diageo’s 58.02% shareholding in Guinness Nigeria Plc.

Guinness made this announcement via a press release on the NGX.

This announcement is the latest in a string of major multinational organizations exiting the country citing tough economic challenges.

The transaction, expected to close in fiscal 2025 pending regulatory approvals, will also see Tolaram enter into long-term licensing and royalty agreements to continue producing the iconic Guinness brand alongside Diageo’s ready-to-drink and mainstream spirits locally.

Guinness has a market capitalization of N110.7 billion based on its current share price of N50.5 per share suggesting the deal could top over N64 billion.

Highlights of the deal

Diageo, while selling its controlling stake, will maintain ownership of the Guinness brand, ensuring its legacy continues under the stewardship of Tolaram.

According to the company, this move aligns with Diageo’s strategic vision to retain brand influence while leveraging Tolaram’s extensive distribution and manufacturing capabilities.

With over fifty years in Africa, Tolaram is one of the continent’s foremost consumer packaged goods companies. It has a history of successful joint ventures with leading multinational corporations, reinforcing its position as a trusted partner in the African market.

The acquisition also marks a significant expansion of Tolaram’s footprint in Nigeria, promising enhanced innovation and value delivery to customers and shareholders.

What they are saying

Omobola Johnson, Board Chair of Guinness Nigeria, hailed the deal as a pivotal moment for the company.

This partnership brings together Tolaram’s deep expertise in manufacturing and distribution with Diageo’s exceptional brand-building and innovation capabilities. It positions Guinness Nigeria for robust growth in this dynamic market,” she said.

Adebayo Alli, Managing Director and CEO of Guinness Nigeria echoed these sentiments, expressing enthusiasm for the collaboration. “This announcement marks an exciting chapter for Guinness Nigeria. Tolaram’s alignment with our values and commitment to sustainability and enduring business success bodes well for our future,” Alli stated.

Haresh Aswani, Managing Director of Tolaram Africa, expressed his excitement about the strategic acquisition. “Welcoming Guinness Nigeria, a company with such a rich legacy and strong consumer loyalty, into our ecosystem is thrilling. This move will expand our significant footprint in the Nigerian market and leverage our combined strengths to foster innovation,” Aswani noted.

Why this deal?
The announcement comes at a challenging time for Guinness Nigeria. The company recently reported a loss after tax of N61.7 billion for the nine months ending March 31, 2024, a stark contrast to the N5.9 billion profit in the same period the previous year.

Despite a 28% year-on-year revenue growth to N220.3 billion, significant foreign exchange losses, totaling N83 billion, and a pre-tax loss of N60.5 billion have severely impacted the company’s financial health.

The financial strain has wiped out Guinness Nigeria’s retained earnings, pushing the company into a negative equity of N4.7 billion.

The interest expenses on loans and borrowings surged by 490% year-on-year to N5.6 billion, compounding the fiscal challenges. Despite these setbacks, Guinness Nigeria remains optimistic about its future.

The company is focusing on innovation and operational excellence to navigate the financial turbulence and is confident in its resilience and strategic vision for long-term sustainability and shareholder value.

Following the acquisition, Guinness Nigeria will continue to be listed on the Nigerian Exchange Ltd.

However, Tolaram also intends to launch a mandatory takeover offer, complying with local law requirements, which will provide existing shareholders an opportunity to exit or participate in the company’s restructured future.

Industry watchers will see this strategic partnership between Tolaram and Diageo as a significant development in the Nigerian beverage industry, combining robust local expertise with global brand leadership to drive future growth and innovation.

It could also assuage government officials who will worry about yet another major exit of a multinational.

Economic Context and Market Trends

Diageo’s decision to exit its controlling stake in Guinness Nigeria follows a broader trend observed among multinational corporations operating in Nigeria. In recent years, several major multinational organizations (MNOs) have exited the Nigerian market amidst challenging economic conditions.

Nairametrics recently reported exits by Kimberly-Clark and GlaxoSmithKline (GSK), with both companies citing economic challenges as primary reasons for their departure.

However, Diageo’s strategy differs markedly from its peers. Instead of a complete withdrawal, Diageo has opted to pass control to Tolaram, a company with a substantial presence and deep understanding of the Nigerian market.

This approach ensures continuity and leverages Tolaram’s established local expertise to navigate the complex economic landscape.

Guinness Nigeria is currently valued at N110 billion, and with the company’s share price at N50.5, the acquisition of Diageo’s 58.02% stake will cost Tolaram at least N64 billion.

This substantial investment underscores Tolaram’s commitment to the Nigerian market and its confidence in the long-term prospects of Guinness Nigeria.

As Tolaram integrates Guinness Nigeria into its portfolio, industry watchers will closely monitor how this strategic move influences the beverage sector and the broader economic environment in Nigeria.

https://nairametrics.com/2024/06/11/breaking-tolaram-group-to-acquire-majority-shares-in-guinness-nigeria-as-diageo-exits/

1 Like

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by EmilyRimmella: 1:03pm On Jun 11
Na this woman own the group?

2 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Cmanforall: 1:03pm On Jun 11
Guiness Nigeria sold

16 Likes 3 Shares

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by EdiskyHarry: 1:03pm On Jun 11
Telegram don use tapwap, hamster Kombat, notting and many other coins blow by deceiving gullible Nigerians.
I don't blame them sha, na bad government, unemployment and hardship go make person get time tap phone screen for more than 20million times.
It is well oo.
For all these drinks it's not necessary now, na garri I dey find

31 Likes 2 Shares

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by abbaashiru(m): 1:04pm On Jun 11
Good investment
Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Omoawoke: 1:04pm On Jun 11
Huge investment I must say

But Diageo’s biggest market is still Europe and North America

3 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by VeryDarkMan01(m): 1:05pm On Jun 11
shocked

Which one be tolaram again
Anyways First time of hearing about the group

1 Like

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by eepeepook: 1:05pm On Jun 11
E go change the taste? Na only that one concern me.

5 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by MaryiethPauline: 1:05pm On Jun 11
Interesting news to all the ndi otu saint bottle of Nigeria PLC
Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Noniblaq1(m): 1:06pm On Jun 11
I sell sweet jeans and trousers. See my thread for more

1 Like

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by ately1(m): 1:06pm On Jun 11
Free beer loading
Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by bestman09(m): 1:07pm On Jun 11
wink

This economic situation affected Guiness too? IT IS FINISHED!

3 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Macdeey: 1:07pm On Jun 11
cool
Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Macdeey: 1:08pm On Jun 11
MaryiethPauline:
Interesting news to all the ndi otu saint bottle of Nigeria PLC
And ......

2 Likes 1 Share

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by ReubenE(m): 1:08pm On Jun 11
Nice

Owners of Dufil and LuckyFibres. I guess their business is not yet impacted negatively by our incompetent government from Buhari to Tinubu.

Good they are saving Guinness cause Guinness must remain with us

6 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by tobenuel(m): 1:09pm On Jun 11
Someone up there said Telegram, but the thread mentioned Tolaram

Well, its alright so far say una no go dey put beer inside sachet one day

bia mama Erelu give that telegram guy one chilled bottle of Extra smooth

1 Like

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Gagare1(m): 1:10pm On Jun 11
Does this mean that Multipro will start distributing Guinness beer in the near future?

3 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Sunofgod(m): 1:10pm On Jun 11
Good investment.....Nigerians love alcohol
Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Newyorkitis(m): 1:11pm On Jun 11
Beer, the future of today.

1 Like

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by HeatSeeker(m): 1:11pm On Jun 11
Cmanforall:
Guiness Nigeria sold

Like play like play o! shocked

I am disappointed in Diageo sha! Only one year of financial hardship and they are packing their bags! Na wa for them. This is a betrayal of their loyal customers and staff.

5 Likes 1 Share

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by HeatSeeker(m): 1:12pm On Jun 11
Gagare1:
Does this mean that Multipro will start distributing Guinness beer in the near future?

My brother na so we see am o!

Noodles and beer grin grin grin

No be better combination angry
Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by HeatSeeker(m): 1:15pm On Jun 11
Omoawoke:
Huge investment I must say

But Diageo’s biggest market is still Europe and North America

Nigeria is the among the top three consumers of Guiness worldwide! That should count for something. Instead they are running. They don't have faith in a country they have made so much money from smh!

4 Likes 1 Share

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by ReubenE(m): 1:15pm On Jun 11
HeatSeeker:


Like play like play o! shocked

I am disappointed in Diageo sha! Only one year of financial hardship and they are packing their bags! Na wa for them. This is a betrayal of their loyal customers and staff.
Not just one year. Pay attention to the figures. No business man will continue under that atmosphere.

Despite a 28% year-on-year revenue growth to N220.3 billion, significant foreign exchange losses, totaling N83 billion, and a pre-tax loss of N60.5 billion have severely impacted the company’s financial health.

"The financial strain has wiped out Guinness Nigeria’s retained earnings, pushing the company into a negative equity of N4.7 billion"

4 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by solarview(m): 1:15pm On Jun 11
Tolaram taking over Nigeria's industries just like Chinese coy

2 Likes 1 Share

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Kukutente23: 1:16pm On Jun 11
Na wa o

Guiness self don go

Tolaram that owns Lekki seaport and free trade that Tinubu built is now taking over Guiness. Maybe Tinubu is taking over Guiness

Funny enough Tinubu was supposed to be this business savvy president that private sector will flourish during his time. Only God knows why reverse is the case.

Even Buhari the herdsman wasn't this bad

4 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Umuinyioku: 1:17pm On Jun 11
EmilyRimmella:
Na this woman own the group?
Lol
Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by HeatSeeker(m): 1:19pm On Jun 11
ReubenE:

Not just one year. Pay attention to the figures. No business man will continue under that atmosphere

After all the mad loyalty we have shown them over the years?! Chai 🙆

The relationship between Nigeria and Guiness is more than money or financial results. Yet they are bailing on us.

2 Likes

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by ReubenE(m): 1:19pm On Jun 11
EmilyRimmella:
Na this woman own the group?
No

Its a Singaporean company

1 Like

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by NewHe: 1:20pm On Jun 11
Tough economic environment including constant picketing by NLC and exorbitant taxes by government!

1 Like

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by ReubenE(m): 1:20pm On Jun 11
HeatSeeker:


After all the mad loyalty we have shown them over the years?! Chai 🙆

The relationship between Nigeria and Guiness is more than money or financial results. Yet they are bailing on us.
Yeah that's true but again, it is still a business and they can't continue.

I modified the other comment with some of the figures they presented.
If na you sef, u go run

1 Like

Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by Gagare1(m): 1:21pm On Jun 11
HeatSeeker:


My brother na so we see am o!

Noodles and beer grin grin grin

No be better combination angry

As in eh?
Na to dey chop and wash down, steadily.
Re: Tolaram Group To Acquire 58.02% Shares In Guinness Nigeria by OgbeniOptional(m): 1:24pm On Jun 11
Lol, like my lawyer told me, there are new ways to clean looted money. Politicians are winning in every country

2 Likes

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