Tolaram, which partnered Nigeria to build the Lekki Free Trade Zone and the country’s first deep sea port, has acquired Diageo’s 58.02 per cent shareholding in Guinness Nigeria Plc.
President Bola Ahmed Tinubu has commended the Indonesian business conglomerate, the Tolaram Group, for believing in Nigeria and having absolute faith in its economy.
Tolaram, which partnered Nigeria to build the Lekki Free Trade Zone and the country’s first deep sea port, has acquired Diageo’s 58.02 per cent shareholding in Guinness Nigeria Plc.
According to an announcement at the Nigerian Exchange on Tuesday, Tolaram will also enter into long-term license and royalty agreements for the continued production of the Guinness products and its locally manufactured Diageo ready-to-drink and mainstream brands.
President Tinubu said Tolaram, by acquiring Diageo’s shares in Guinness, had shown that it has a long-term view of doing business in Nigeria, according to a statement issued by Bayo Onanuga, Special Adviser to the President on Information & Strategy, on Tuesday.
Tolaram has been doing business in Nigeria in the last 50 years.
In choosing to expand its investment footprints in Nigeria, Tolaram has demonstrated strong faith and confidence in Nigeria's economy, the President said.
“President Tinubu welcomes Tolaram to the alcoholic beverage sector of Nigeria’s business landscape and hopes the group’s business will continue to flourish.
“President Tinubu gives assurances to investors and Nigeria’s businesses, promising that his government will continue to make the operating environment more conducive and transparent.
“He said that the multi-pronged reforms and interventions being implemented on the economic and financial fronts would deliver sustained growth and enduring profitability for investors,” the statement said.
SaharaReporters earlier reported on Tuesday that Guinness Nigeria Plc had announced that Tolaram would acquire Diageo's 58.02% shareholding in the firm.
It was reported that it would enter into long-term license and royalty agreements for the continued production of the Guinness brand and its locally manufactured Diageo ready-to-drink and mainstream spirits brands.
This was contained in a statement issued on Tuesday by Legal Director/Company Secretary, Mrs Abidemi Ademola, shortly after the terms of an agreement were signed, 11 June 2024.
Mrs Ademola explained that the transaction was expected to be completed during Fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria.
She said, "Diageo remains deeply committed to Nigeria and will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long-term, enabling the next phase of growth and development of Guinness Nigeria under the stewardship of Tolaram.
"With a five-decade presence in Africa, Tolaram is one of the largest consumer packaged goods companies on the continent and has forged joint venture partnerships with several leading consumer multinational companies.
"In partnership with Guinness Nigeria and Tolaram, Diageo will continue to drive the brand and marketing strategy for Guinness in Nigeria, to ensure Diageo's exceptional capabilities in brand building and innovation continue to drive long-term growth for Guinness in Nigeria."
Ademola, further stated that sequel to the completion of this transaction, "Guinness Nigeria will remain listed on the Nigerian Exchange Ltd. and, subject to regulatory approvals, Tolaram intends to launch a mandatory takeover offer in compliance with local law requirements.
She quoted the Board Chair of Guinness Nigeria, Omobola Johnson, saying the deal's announcement represents a significant opportunity for the next phase of growth for Guinness Nigeria.
This means Diageo sold its stake in Guinness Nigeria, joining other multinationals exiting the country amid its economic crisis and high cost of living.
In May, American multinational and makers of “Huggies”, Kimberly-Clark, exited the Nigerian market, citing the harsh economy.
The company’s decision came after it had operated in Nigeria for 14 years.
The company said it intended to adjust global strategic priorities amid the prevailing economic conditions in Nigeria.
The firm announced that it would close its manufacturing facilities and commercial office in Lagos State, ending production, marketing, and sales of Huggies and Kotex products in Nigeria.
In August 2023, GlaxoSmithKline Consumer Nigeria Plc announced plans to transfer its business activities to a third-party organisation.
Similarly, in November 2023, French pharmaceutical company, Sanofi-Aventis Nigeria Limited, halted its direct operations in the country.
Last December, Procter and Gamble also revealed plans to shift from local production to importing its products.
The departure of these international companies signals a challenging business environment in Nigeria, prompting reassessments of market strategies by global firms.