Guinness Nigeria Plc, a member company of Diageo Plc, has agreed to acquire the distribution rights to the global beverage alcohol producer’s international Premium Spirits (IPS) brands in Nigeria, in a deal worth N2.35 billion.
“The transaction we are announcing today will facilitate the achievement of our ambition to create the best performing, most trusted and respected consumer products company in Nigeria by leveraging the strength of our unparalleled portfolio of beer, adult premium non-alcoholic drinks (APNADs), ready to drink (RTDs) as well as spirits,” Peter Ndegwa, the Managing Director/CEO of Guinness Nigeria Plc, said in a statement on Monday.
As part of the transaction, Guinness Nigeria will also take over various assets including the current inventory of Diageo Brands Nigeria Limited, the wholly-owned Diageo business which currently distributes and markets the IPS brands in Nigeria.
Ndegwa notes that the integration of the Diageo IPS brands with the Guinness Nigeria brand portfolio best fits the company’s strategy of filling the gap in its total beverage alcohol portfolio. He adds that the move also allows Guinness to compete across segments within the market.
The transaction is expected to be concluded by December 31, 2015 and the new distribution agreement for the IPS brands will become effective on January 1, 2016 subject to receiving all regulatory approvals.
The shares of Guinness Nigeria rose by 2.28 percent on Monday to close at N127.45 ($0.64) on the Nigeria Stock Exchange.