- The company’s imminent departure may not be unconnected to the staggering N61.9 billion loss after tax recorded between July 2023 and March 2024
Leading brewery brand, Guinness, says it will exit the Nigerian market as turbulent business climate and crippling economic policies of President Bola Tinubu-led administration continue to wreak havoc.
The company, which has been operating in Nigeria since 1950, will now sell off its controlling shares to Singaporean conglomerate Tolaram ahead of its departure from the West Africa nation next year.
The company’s imminent departure may not be unconnected to the staggering N61.9 billion loss after tax recorded between July 2023 and March 2024,
Recall that Tinubu had floated the naira in an effort to unify the currency’s value on the official and parallel foreign exchange markets.
The decision, however, proved catastrophic for many multinational companies, including Guinness Nigeria, as they suffer monumental financial setbacks engendered by revenue decimation.
Guinness Nigeria N61.7 billion loss after tax in Q3 represented a 1,000 per cent decrease from the N5.9 billion profit generated in the same period last year.
The huge loss worsened by the naira’s continued plummeting may have compelled Diageo, Guinness’ parent company, to sell its 58.02 per cent majority stake to the Singaporean group.
“Under the terms of an agreement signed today, 11 June 2024, Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria royalty agreements for the continued production of the Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands,” the company said in a statement Tuesday.
Guinness Nigeria Plc, 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, but with Tolaram’s controlling stake acquisition expected to conclude by 2025, the global brewery brand will have spent 75 years in Nigeria.
In the statement, Guinness said the firm would leave Nigeria next year and hand over to a third-party venture.
“The transaction is expected to be completed during fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria,” said the statement signed by Abidemi Ademola, Guinness’s legal director.
Diageo, however, stated that the sale of its Nigerian brand would not in any way affect its ownership of the Guinness global brand.
Diageo “will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long term.”
Diageo now joins the long list of other multinational companies, like GlaxoSmithKline and Microsoft, that have left Nigeria in the last one to two years, citing the tough and unfavourable economic climate as making business unprofitable.
Some of Diageo’s popular brands in Nigeria include Smirnoff Ice, Smirnoff Vodka, Orijin Bitters, Malta Guinness, Gordons Orange Sunset, and Dubic Malt.
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