Guinness is set to join a growing list of multinationals exiting Nigeria due to an increasingly hostile economic environment.
Companies like GlaxoSmithKline and Microsoft have already left the country for similar reasons.
After operating in Nigeria since 1950, Guinness has announced its departure, attributing the decision to the severe economic conditions exacerbated by President Bola Tinubu’s administration.
On Tuesday, Guinness revealed plans to sell its controlling shares to the Singaporean conglomerate Tolaram Group.
The brewery brand reported a substantial N61.9 billion loss after tax from July 2023 to March 2024, following President Tinubu’s decision to float the naira in an attempt to unify the currency’s value on both official and parallel foreign exchange markets.
This policy move backfired, causing significant financial setbacks for many multinational companies, including Guinness Nigeria, which saw its N61.7 billion loss after tax in Q3—a stark contrast to the N5.9 billion profit reported in the same period the previous year.
The continued depreciation of the naira likely influenced Diageo, Guinness’ parent company, to sell its 58.02 percent majority stake to Tolaram Group.
“Under the terms of an agreement signed today, 11 June 2024, Tolaram will acquire Diageo’s 58.02% shareholding in Guinness Nigeria 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, listed on the Nigerian Stock Exchange, was incorporated on April 29, 1950, initially importing Guinness Stout from Dublin. With Tolaram’s acquisition expected to conclude by 2025, Guinness will have marked 75 years in Nigeria.
In their statement, Guinness confirmed it would leave Nigeria next year, transitioning operations to a third-party venture.
“The transaction is expected to be completed during fiscal 2025, subject to obtaining the requisite regulatory approvals in Nigeria,” said the statement signed by Abidemi Ademola, Guinness’s legal director.
Diageo emphasized that this sale would not affect its ownership of the Guinness global brand. The company “will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long term.”
Diageo’s departure adds to a list of multinationals like GlaxoSmithKline and Microsoft that have exited Nigeria in recent years, citing unprofitable business conditions due to the challenging economic climate.
Diageo “will retain ownership of the Guinness brand, which will be licensed to Guinness Nigeria for the long term.”
Popular Diageo brands in Nigeria include Smirnoff Ice, Smirnoff Vodka, Orijin Bitters, Malta Guinness, Gordons Orange Sunset, and Dubic Malt.