Diageo sells shares in D&G and GAPL to HN and acquires shares in GGBL
Diageo has today completed a transaction with Heineken which brings increased focus to their respective beer businesses in Jamaica, Malaysia, Singapore and Ghana. The transaction comprises:
- The sale of Diageo''s 57.87% shareholding in Desnoes & Geddes Limited (D&G) to Heineken which will increase Heineken’s shareholding in D&G to 73.32%.
- The sale of Diageo''s 49.99% stake in GAPL Pte Limited (GAPL) to Heineken giving Heineken full ownership of GAPL.
- The acquisition by Diageo of Heineken’s 20% shareholding in Guinness Ghana Breweries Limited (GGBL) which will increase Diageo''s shareholding in GGBL to 72.42%.
The net cash consideration receivable for the transaction is $780.5 million (approximately £515 million). Payment to Diageo will be substantially settled today and will be used to reduce borrowings. The transaction will result in an exceptional profit on disposal of approximately £440 million after tax. It is approximately 0.6 pence per share dilutive to eps pre-exceptional in the first full year assuming a marginal interest rate of 2.5%.
Ivan Menezes, Chief Executive of Diageo, said:
‘The transaction we have announced today continues our proactive approach to our portfolio, enhancing our focus on the core to achieve Diageo’s performance ambition. It provides a strong route to consumer for Guinness which will grow the brand in these markets. I am pleased that this transaction meets the clear strategic objectives of both Heineken and Diageo.’
GAPL holds 51% of Guinness Anchor Berhad in Malaysia and is the licensee for Guinness and ABC Stout distribution for the Singapore market.
As part of these transactions Diageo will have long term distribution agreements with GAB for the brewing and distribution of Guinness and other Diageo beer brands in Malaysia and Singapore, and with D&G in relation to the brewing and distribution of Guinness and the distribution of spirits brands in Jamaica.
Diageo’s international distribution rights to Red Stripe lager will transfer to Heineken. GGBL will continue to be Heineken’s exclusive distributor in Ghana.