By Olaudah Equiano
Nigerians woke up to news yesterday that Diaego, the parent company of Guinness Nigeria, has sold 58% of its shareholding to a company known as the Tolaram Group for the sum of 103 billion naira ($70 million).
Tolaram already owns several popular Nigerian consumer products, including Indomie, Lush Hair extensions, Minimee, Dano Milk, Lekki Port, Hypo, Kelloggs, Colgate Mimie noodles, and Power Oil.
The announcement comes at a challenging time for Guinness Nigeria. The company recently reported a loss after tax of N61.7 billion for the nine months ending March 31, 2024, a stark contrast to the N5.9 billion profit in the same period the previous year.
Despite a 28% year-on-year revenue growth to N220.3 billion, significant foreign exchange losses totaling N83 billion and a pre-tax loss of N60.5 billion have severely impacted the company’s financial health.
The financial strain has wiped out Guinness Nigeria’s retained earnings, pushing the company into a negative equity position of N4.7 billion.
The interest expenses on loans and borrowings surged by 490% year-on-year to N5.6 billion, compounding the fiscal challenges. Despite these setbacks, Guinness Nigeria remains optimistic about its future.
Diageo will still retain the brand name Guinness, and so the new owners, Tolaram, will pay a licensing fee every year to Diageo to be able to use the name Guinness for business and commercial purposes in Nigeria.
Who is the Tolaram Group, which invested 103 billion naira to acquire the Guinness Nigeria legacy business?
The article was culled by Confiance News from Olaudah Equiano’s official X account.
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