Don't mix your drinks: Diageo offloads stakes in Desnoes & Geddes and GAPL while Heineken sells Guinness Ghana Breweries

Catherine Neilan
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Diageo will use the cash to reduce borrowings (Source: Getty)

Drinks giants Diageo and Heineken are taking their own advice not to mix different beverages.

Diageo has sold its 57.9 per cent holding in Jamaican brewer Desnoes & Geddes to Heineken which will increase Heineken's shareholding in D&G to 73.3 per cent. Heineken will make a mandatory offer for the shares shortly.

It has also offloaded its 49.99 per cent stake in GAPL, giving Heineken full ownership of the Malaysian-listed group.

And Diageo has bought Heineken's 20 per cent holding in Guinness Ghana Breweries, which will increase Diageo's shareholding in GGBL to 72.42 per cent.

Diageo will receive its payment of $780.5m (£515m) today, and will use it to reduce borrowings. It will result in an exceptional profit after tax of £440m.

Diageo's chief executive Ivan Menezes said: “'The transaction we have announced today continues our proactive approach to our portfolio, enhancing our focus on the core to achieve Diageo's performance ambition.

“It provides a strong route to consumer for Guinness which will grow the brand in these markets. I am pleased that this transaction meets the clear strategic objectives of both Heineken and Diageo.”

Jean-François van Boxmeer, Heineken chief executive and chairman of the executive board, added: "Today's transaction represents another important step towards ensuring that our portfolio of assets and participations is optimally structured to support our strategic agenda. Having greater commercial control in the important regions of South-East Asia and the Caribbean will allow us to maximise the strong potential of our brands in these growth markets.

"Our close collaboration with Diageo has been very productive over the years and I would like to thank them for their valued partnership."

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