Brewer Diageo (DEO) has agreed to sell its 80.4% stake in Guinness Ghana to France’s Castel Group for $81 million.
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Diageo said that it would continue to retain ownership of the Guinness brand and other brands produced by Guinness Ghana, including some spirits labels. Diageo will also “continue to drive the brand and marketing strategy” for Guinness in partnership with Castel Group.
The sale comes days after Diageo denied reports that it was looking to sell the entire Guinness brand, including its iconic Irish brewery in Dublin and its 34% stake in champagne and cognac business Moët Hennessy. Reports had suggested that Guinness, potentially up for private sale or public listing, could be worth more than $10 billion.
Popular in Africa
Diageo said its Guinness Ghana sale is part of its “asset-light” operating model which sees beer products adapt to local markets. The company sold its stakes in Guinness Nigeria last September and Guinness Cameroon in 2022. Guinness Cameroon was also sold to Castel Group.
According to Diageo, Guinness is a popular beer throughout Africa. It noted that net sales in its Africa Regional Markets grew 6% with Guinness helping to drive those sales. Castel Group has significant brewing operations in Africa across more than a dozen countries, including Morocco and Madagascar.
Is DEO Stock a Buy?
According to TipRanks, DEO stock has a consensus Strong Buy rating based on three Buy recommendations assigned in the past three months. The average DEO price target of $142.67 implies 15% upside from current levels.
