By Andrea Figueras

Diageo said it would sell its shareholding in Guinness Ghana Breweries for $81 million to beverage company Castel Group, the latest move in a shift of its business model in Africa.

The U.K. spirits maker said Tuesday that the sale of its 80.4% stake builds on its relationship with Castel, with the two companies partnering in 11 other markets on the continent.

The news comes after media reports recently claimed that Diageo could divest some of its subscale or underperforming labels, including the premier beer brand Guinness, at a time when the industry is facing a downgrade cycle with sliding demand in China and the U.S.

Earlier this week, the company said it had no intention to sell its Guinness brand nor its stake in Moet Hennessy.

Under the agreement, the maker of Johnnie Walker scotch and Smirnoff vodka will retain ownership of the Guinness brand as well as other Diageo brands currently produced by Guinness Ghana, which will be licensed to Guinness Ghana under a new long-term license and royalty agreement.

Diageo will continue to operate the Guinness marketing strategy in Ghana in partnership with Castel.

The move marks the latest shift in Diageo's African strategy in recent years, and is in line with plans to adapt business structures based on local conditions.

In July 2022, Diageo sold its Guinness Cameroon business to Castel, and in June last year said it planned to sell its stake in Guinness Nigeria to Singapore-based marketing and distribution conglomerate Tolaram.

The group decided in October 2023 to establish a wholly-owned spirits-focused business to manage the import and distribution of its international premium spirits portfolio in West and Central Africa, with Nigeria as one of the hubs.

After completion of the transaction--which is expected this calendar year subject to regulatory approvals--Guinness Ghana will remain listed on the Ghanian Stock Exchange.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

January 28, 2025 10:54 ET (15:54 GMT)

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