Diageo snaps up rest of United National Breweries beer business

2015-04-02 09:33

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Diageo, the world’s largest spirits maker, said today it had agreed to acquire control of United National Breweries – which makes traditional sorghum beer – buying the remaining 50% stake it did not already own.

The biggest umqombothi business in South Africa struck a deal with Diageo, the maker of Smirnoff vodka, Johnnie Walker whisky and Guinness stout, in January 2013 for Diageo to buy half of United National Breweries.

Today Diageo said it would pay an initial $22 million (about R263 million) to Pestello Investments for the remaining half.

The deal includes a potential earn-out payment of up to $14 million and is conditional on consent from the South African competition authority.

Diageo’s newly formed Africa, Eastern Europe and Turkey region, is now the company’s second largest and is the biggest contributor to net sales growth.

Net sales grew 10% from strong performance of spirits and a robust performance of beer in Africa, where the company reported a growth in net sales despite volume declines.

Africa represents Diageo’s largest group of emerging markets in terms of net sales and employs more than 5300 people a quarter of Diageo’s total workforce worldwide.

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