Diageo has announced that it no longer plans to raise its stake in the Guinness Nigeria subsidiary, citing tough market conditions. Last year, Diageo had said it planned to raise its stake in the unit by 15.7%, in a deal worth 41.4bn naira, taking its stake to 70%.
However, the naira has slumped in recent months, which has seen the share price of Guinness Nigeria also fall considerably below Diageo’s bid offer.
The announcement comes weeks after Diageo gave Guinness Nigeria a $95m loan facility to help it deal with dollar shortages.
Guinness Nigeria played down the move, noting: “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.”
Nigeria accounted for 3% of Diageo’s total sales in the last fiscal year.