After operating in Nigeria since 1950, Guinness Nigeria is set to exit the country, having sold its 58.02% stake to Tolaram Group, a consumer food giant.
Tolaram paid ₦81.60 per share, representing a 60% premium over Guinness Nigeria’s Monday closing price of ₦50.
The decision comes amid a challenging economic climate under President Bola Tinubu’s administration. On Tuesday, Guinness announced it would exit the Nigerian market and transfer its controlling shares to the Singaporean conglomerate Tolaram Group.
The brewery brand reported a staggering ₦61.9 billion loss after tax between July 2023 and March 2024. This loss followed President Tinubu’s attempt to unify the currency’s value on the official and parallel foreign exchange markets by floating the naira. The move backfired, causing significant financial setbacks for many multinational companies, including Guinness Nigeria. The company’s ₦61.7 billion loss after tax in Q3 represented a 1000% increase from the ₦5.9 billion revenue generated in the same period the previous year.
This substantial loss, exacerbated by the naira’s continued downward trend, likely influenced Diageo, Guinness’ parent company, to sell its 58.02% majority stake to the Singaporean group.
“Under the terms of an agreement signed today, June 11, 2024, Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria, along with 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. With Tolaram’s 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 operations to a third-party venture.
He said, “I have to add the money to the price of the rams before selling them to make profit. I came to Alaba market with 300 rams since June 5, as at today I have not sold up to ten rams. Buyers have been coming to ask for the price of a ram, promising that they will come, but I have not seen them.”
“In 2023, I thought that the prices of rams were expensive, but that of this year is just too much. The prices wouldn’t have been this high if not for the removal of fuel subsidy that led to the high cost of transport”.
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See some reactions are shown below:
sabitalk1 said, “My landlady dey always buy big big cows every year, e reach this year she traveled go ijebu go do farm work 😂😂😂😂😂 tinubu na your mate? 😂😂😂”.
akeyo44__ said, “Why Una go dey call ordinary ram 1m I wan go buy ram today the werey tell me say 1m I can’t even price it ago house go give my mama 200k make them buy 2 carton of chicken”.
jamiuharleemarh said, “I never chop na ram I go buy and which pepper I wan use cook am 😂😂 18 rodo”.
