FTSE 100 drinks firm Diageo (DGE) has agreed a deal to acquire the remaining 50% of its South African joint venture United National Breweries.
In January 2013 Diageo agreed to acquire a 50% interest in the company which owns United National Breweries’ traditional sorghum beer business in South Africa. The remaining 50% was owned by Pestello Investments, a company affiliated with Vijay Mallya of India’s largest spirits company United Spirits.
Diageo will buy the remaining 50% stake for an initial $22m (£14.8m) and a potential earn-out payment of up to $14m.
Subject to securing the consent of South African authorities, the deal is expected to close within the current financial year.
Diageo stated today: “Once completed, this transaction will give Diageo control of the leading traditional sorghum beer business in South Africa, including the ability to make investment decisions to support the continued growth of United National Breweries’ brands in the sorghum beer category.”
The UK spirits and beer group took majority control of Vijay Mallaya’s United Spirits in June last year after shareholders backed its quest to increase its stake to 55% after protracted negotiations.
Diageo shares eased up 0.25% in morning trading to 1,873p on the news.
No comments yet