Guinness, having operated in Nigeria since 1950, announced on Tuesday that it will exit the Nigerian market, selling its controlling shares to the Singaporean conglomerate Tolaram Group.
This decision comes amidst a challenging economic environment under President Bola Tinubu’s administration.
The brewery brand reported a substantial loss of N61.9 billion after tax from July 2023 to March 2024.
This financial downturn followed President Tinubu’s decision to float the naira to unify its value across official and parallel foreign exchange markets, a move that backfired and negatively impacted many multinational companies, including Guinness Nigeria.
The company’s N61.7 billion loss after tax in Q3 marked a drastic decline from the N5.9 billion profit in the same period the previous year, a decrease of 1,000 percent.
The continuing depreciation of the naira likely influenced Diageo, Guinness’ parent company, to sell its 58.02 percent majority stake to Tolaram Group.
Under the agreement signed on June 11, 2024, Tolaram will acquire Diageo’s shareholding in Guinness Nigeria, along with royalty agreements for the continued production of Guinness and Diageo’s locally manufactured ready-to-drink and mainstream spirits brands.
Guinness Nigeria Plc, incorporated on April 29, 1950, initially imported Guinness Stout from Dublin and has been listed on the Nigerian Stock Exchange. With Tolaram’s acquisition expected to be finalized by 2025, Guinness will have been present in Nigeria for 75 years.
In its statement, Guinness indicated that the company would leave Nigeria next year, transferring operations to a third-party venture.
The transaction’s completion is anticipated during fiscal 2025, pending necessary regulatory approvals in Nigeria, according to Abidemi Ademola, Guinness’s legal director.
Despite the sale, Diageo will retain ownership of the global Guinness brand, which will be licensed to Guinness Nigeria for the long term.
Diageo’s exit is part of a broader trend of multinational companies like GlaxoSmithKline and Microsoft withdrawing from Nigeria in the past one to two years due to the challenging economic conditions that have rendered business operations unprofitable.
In Nigeria, Diageo is known for brands such as Smirnoff Ice, Smirnoff Vodka, Orijin Bitters, Malta Guinness, Gordons Orange Sunset, and Dubic Malt.
