Diageo to form JV for South African beer business

Alcoholic beverages company Diageo has reached an agreement to form a 50:50 joint venture in respect of United National Breweries' traditional sorghum beer business in South Africa.

Alcoholic beverages company Diageo has reached an agreement to form a 50:50 joint venture in respect of United National Breweries' traditional sorghum beer business in South Africa.

The FTSE-100 listed drinks company stated that it had reached an agreement with Dr Mallya, an investor, to enter into a memorandum of understanding under which both parties would form the joint venture.

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In addition to announcing its joint venture, Diageo stated that it had entered into an agreement to acquire a 50% interest in the company which owns United National Breweries' sorghum beer business. It stated that the remaining 50% would be held by a company affiliated with Dr Mallya.

Diageo is to acquire its 50% interest for $36m (approximately £23m), subject to customary adjustments.

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The transaction, which is conditional on both parties receiving consent from the South african competition authority, is expected to be completed in the first half of the year.

MF

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