Diageo has reached agreement to take control of United National Breweries’ traditional sorghum beer business in South Africa by acquiring the remaining 50% interest which it did not already own.
Diageo bought half the company in January 2013, with the remainder of the business staying in the hands of Pestello Investments Inc., a company affiliated to Dr Vijay Mallya.
The drinks giant today announced it would acquire the rest of the business for an initial payment of $22m (approx £14.8m) and a potential earn-out payment of up to $14m (c£9.4m).
The transaction is conditional on (among other things) consent from the South African competition authority and is expected to complete in this fiscal year.
The company said: “Once completed, this transaction will give Diageo control of the leading traditional sorghum beer business in South Africa, including the ability to make investment decisions to support the continued growth of United National Breweries’ brands in the sorghum beer category.”
