Economic challenges: Diageo stops N23bn deal with Guinness Nigeria

The Dwindling Nigeria economic has triggered Diageo Plc to cancel its plan to take offer 15.7 per cent of Guinness Nigeria.

The Company Secretary, Guinness Nigeria, Rotimi Odusola in a statement made available to the Nigerian Stock Exchange today in Lagos revealed that, Diageo will not proceed with potential offer to increase its equity stake in Guinness Nigeria.

Guinness Nigeria currently has share outstanding of 1.506 billion with share price of N97.99 kobo which make it market value to stand at N147.562 billion. Diageo was planning to increase its stake in Guinness Nigeria by 15.7 per cent amounted to N23.167 billion.

Odusola today notified the general public through the Nigerian bourse that, further to its announcement on September 9 2015 of Diageo Plc intention to make an offer through its wholly owned subsidiary Guinness Overseas Limited for up to 15.7 per cent of the share capital of Guinness Nigeria (Potential offer), it has received a letter from Guinness Overseas Limited confirming that it has taken the decision not to proceed with the potential offer.

“In the light of the challenges market conditions in Nigeria over the past 12 months, it proposes to focus its resources on continuing to support Guinness Nigeria.”

“Diageo has confirmed that it maintains a positive outlook for Nigeria in the long-term and that it expects the market to continue to grow. Nigeria remains a key strategic market for Diageo which remains supportive of Guinness Nigeria, a company with a long and rich history, its board and management and the actions taken by Guinness Nigeria to mitigate the impact of challenging market conditions, Odusola stated.