Business

Guinness Share Price Surges on Tolaram Takeover Announcement

Guinness Nigeria’s share price surged by 8.41%, closing at N54.80 on June 11, 2024, up from N50.55, following the announcement of Tolaram’s takeover.

The announcement revealed that Tolaram would acquire Diageo’s 58.02% stake in Guinness Nigeria and establish long-term licensing and royalty agreements for the continued production of the Guinness brand and Diageo’s locally manufactured spirits.

Investors responded positively, with a turnover volume of 178,098 shares and a turnover value of N9.8 million.

Despite the recent gain, Guinness Nigeria has faced a challenging year, with a 23.4% year-to-date decline. Other breweries like International Breweries and Nigerian Breweries have also seen significant declines, driven by substantial financial losses. Guinness Nigeria reported a pre-tax loss of N60.5 billion for the nine months ending March 31, 2024.

The acquisition is part of a trend of multinational corporations exiting the Nigerian market due to economic challenges. Diageo’s departure contrasts with other breweries like Nigerian Breweries and International Breweries, which are raising capital through rights issues.

Tolaram’s acquisition of Guinness Nigeria is seen as a strategic move, with the new majority shareholder expected to support Guinness Nigeria through strategic cash infusions and leveraging Tolaram’s extensive distribution network.

Guinness Nigeria will remain listed on the Nigerian Exchange Ltd, with Tolaram planning a mandatory takeover offer for existing shareholders. This partnership aims to combine local expertise with global brand leadership to drive future growth and innovation in Nigeria’s beverage industry.

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