Diageo has sold its stakes in Jamaican brewer Desnoes & Geddes and GAPL Pte , the majority owner of Malaysia's Guinness Anchor Berhad, to Heineken NV for $780.5 million.
The transaction also includes Diageo's acquisition of a 20 per cent stake in Guinness Ghana Breweries from the Dutch brewer, raising Diageo's total stake in GGBL to 72.42 per cent.
The maker of Smirnoff vodka, Guinness beer and Johnnie Walker whisky said the deal with Heineken would increase the companies' focus in beer businesses in Jamaica, Malaysia, Singapore and Ghana.
Diageo sold its 57.87 per cent stake in D&G, the maker of Red Stripe beer, and its 49.99 per cent stake in GAPL to Heineken, the companies said.
Diageo said the deals would result in an exceptional profit after tax of about £440 million.
The company generates one-fifth of its revenue from beer, mostly the Guinness brand, which is growing more slowly than spirits.
Despite the weak performance, Diageo often says the business is critical, since it gives it a route to market in Africa, making it easier to sell its spirits such as Johnnie Walker whisky.
"It (the deal) provides a strong route to consumer for Guinness which will grow the brand in these markets," chief executive Ivan Menezes said.
Heineken, the world's third-largest brewer, said it would be able to drive the investment and strategic direction of the operating companies in Jamaica and Malaysia.
Following the deal, Heineken's stake in D&G will go up to 73.3 per cent, while it will have full control of GAPL, which is the licensee for Guinness and ABC Stout distribution for the Singapore market.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here