Diageo, Heineken Announce Exchange of Emerging-Market Assets
October 07 2015 - 3:11AM
Dow Jones News
By Ed Ballard
LONDON--Drinks companies Diageo PLC and Heineken NV Wednesday
announced an exchange of emerging-market brewing assets in a deal
that will result in a profit for Diageo of 440 million pounds ($671
million).
In a deal the companies said will bring "increased focus to
their respective beer businesses", London-based Diageo has sold its
57.9% stake in Desnoes & Geddes Ltd. to Heineken, increasing
the Dutch company's stake to 73.3%. D&G is the Jamaican brewer
of Red Stripe lager and Dragon stout.
Diageo also sold 49.99% of GAPL Pte Ltd., which distributes
stout beer in Singapore and Malaysia, handing Heineken full
ownership.
"Having greater commercial control in the important regions of
South-East Asia and the Caribbean will allow us to maximize the
strong potential of our brands in these growth markets," Heineken
Chief Executive Officer and Chairman Jean-François van Boxmeer
said.
At the same time, Diageo acquired Heineken's 20% stake in
Guinness Ghana Breweries Ltd., increasing its share holding to
72.4%.
The companies have struck licensing agreements for the beer
brands involved in Jamaica and Ghana.
The transaction "provides a strong route to consumer for
Guinness which will grow the brand in these markets," Diageo Chief
Executive Officer Ivan Menezes said.
Diageo will receive a net payment of $780.5 million in cash,
which it will use to pay down debt, and record an exceptional
profit of around GBP440 million after tax.
Write to Ed Ballard at ed.ballard@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
October 07, 2015 02:56 ET (06:56 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
Diageo (LSE:DGE)
Historical Stock Chart
From Aug 2024 to Sep 2024
Diageo (LSE:DGE)
Historical Stock Chart
From Sep 2023 to Sep 2024