Diageo, Heineken Exchange Emerging-Market Assets
October 07 2015 - 4:00AM
Dow Jones News
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 ($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
Southeast 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-Franç ois 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 £ 440 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 03:45 ET (07:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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