By Modupe Gbadeyanka
Following tough market conditions in Nigeria, Diageo has announced that it would no longer increase its stake in Guinness Nigeria as earlier planned.
This decision was made known in a statement issued on Tuesday by the company.
In the statement signed by Diageo’s Secretary, Mr Rotimi Odusola, the company disclosed that it would now “focus its resources on continuing to support Guinness Nigeria.”
Diageo explained that it backed out of its earlier plan to buy another 15.7 percent of Guinness Nigeria for up to N41.37 billion, raising its stake in the company to 70 percent, because of the “challenging market conditions in Nigeria over the past 12 months.”
Diageo is the maker of Johnnie Walker Scotch and Smirnoff vodka.
The statement noted that, “Diageo has confirmed that it maintains a positive outlook for Nigeria in the long term and that it expects the market to continue to grow.
“Nigeria remains a key strategic market for Diageo, which remains supportive of Guinness Nigeria, a company with a long and rich history, its board and management and the actions taken by Guinness Nigeria to mitigate the impact of challenging market conditions.”
In September 2016, Diageo offered a loan of $95 million to Guinness Nigeria to help it cope with dollar shortages in Nigeria, which was affecting its operations.