Heineken and Diageo Complete $780.5 Million Deal
Heineken and Diageo have completed a transaction to bring increased focus to their respective beer businesses and certain licensing arrangements in Jamaica, Malaysia and Singapore and Ghana. The transaction comprises four elements.
Heinken has taken control of Desnoes & Geddes, which trades as Red Stripe Jamaica and is a leading Jamaican brewer and beverage manufacturer, by acquiring Diageo’s 57.9% shareholding in the company.
Heineken now has full ownership of GAPL, having acquired Diageo’s shareholding, which was slightly lower than 50%. GAPL owns 51% of the issued share capital of Guinness Anchor Berhad (GAB), which is listed on the Malaysian Stock Exchange. GAPL is also the licensee for Guinness and ABC Stout distribution for the Singapore market.
Heineken has sold its 20% ownership stake in Guinness Ghana Breweries (GGBL) to Diageo.
Heineken and Diageo have entered into licensing agreements for each other’s brands currently in the respective portfolios in Jamaica and Ghana.
Heineken will pay Diageo a total net cash consideration of US$780.5 million (Eur696 million) for the transaction. The transaction is mutually beneficial to Heineken and Diageo and will allow both parties to concentrate their resources in the individual markets, whilst at the same time providing a framework for ongoing, long-term cooperation. As majority owner, Heineken will be able to drive the investment and strategic direction of the operating companies in Jamaica and Malaysia.
Jean-François van Boxmeer, chief executive and chairman of Heineken, comments: “The transaction represents another important step towards ensuring that our portfolio of assets and participations is optimally structured to support our strategic agenda. Having greater commercial control in the important regions of South-East Asia and the Caribbean will allow us to maximise the strong potential of our brands in these growth markets. Our close collaboration with Diageo has been very productive over the years and I would like to thank them for their valued partnership.”
Ivan Menezes, chief executive of Diageo, says: “The transaction 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.”
