The company announced that it had entered into an agreement to acquire the remaining 50 per cent of UNB’s Traditional Sorghum Beer business in South Africa, currently owned by Pestello Investments Inc.
While dependent on consent from the South African competition authority, among a number of other factors, if agreed, Diageo will become the complete owner of UNB’s Traditional Sorghum Beer business, after having already acquired the other 50 per cent of the business earlier in January.
The remaining 50 per cent will be sold to Diageo for an initial payment of $22 million and a potential earn-out payment of up to $14 million.
UNB in South Africa is the leading manufacturer of Traditional African Sorghum Beer (Umqombothi). As the market leader in the category, UNB holds the major South African Umqombothi brands in its stable. Upon completion of the acquisition, Diageo will have total control of UNB’s Traditional Sorghum Beer business in South Africa, including the ability to make investment decisions to support the continued growth of UNB’s brands in the sorghum beer category.
Completion of the acquisition is expected to happen in this fiscal year.
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