Castel Group to beef up presence in Cameroon alcohol beverage market, eyes’s Diageo’s unit

CAMEROON – British multinational alcoholic beverage company, Diageo, has once again brokered a sales agreement of another of its African subsidiary with French beverage company Castel Group.

The maker of premium whisky has agreed to sell its brewery in Cameroon, Guinness Cameroon S.A., to industry peer Castel for £389m.

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This is the second deal fostered by both parties this year following Diageo’s sale of Meta Abo Brewery to the world-renowned wine producer.

On completion, Castel will take over the production and nationwide distribution of Guinness in Cameroon under a licence and royalty agreement.

The deal reflects Diageo’s flexible, asset-light beer operating model that seek to select the most appropriate structure and route to market, based on local conditions, supporting greater efficiency and profitability.

According to Diageo, this agreement provides a robust platform for Guinness expansion in both production and distribution via Castel’s five brewing sites and their national distribution network.

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Dayalan Nayager, President Diageo Africa, said, “Guinness has outgrown its existing brewery in Douala as a result of its strong performance. Under this new agreement, the brand will have both expanded brewing capacity and distribution.

“We look forward to unlocking even greater potential through this agreement with Castel, ensuring we continue to have great tasting Guinness across Cameroon.”

As part of the agreement, Guinness marketing in Cameroon will continue to be managed by the Guinness Global Brand Team, who will set strategy with dedicated Diageo resources in market working alongside Castel.

The transaction is expected to complete in the first half of fiscal 2023, subject to regulatory clearances.

When completed, it will result in an exceptional gain on disposal of approximately £250 million after tax.

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The planned acquisition of Guinness Cameroon marks a new milestone in the development of Castel Group, both in Africa and in Cameroon where it has been recognised as an economic player for many years through SABC.

It has also come at a time when the company has cessed bottling collaboration with the Coca-Cola group in Angola, Egypt, Senegal, Burkina Faso, Côte d’Ivoire and Cameroon as it narrows its focus on soft beverage segment and build interest in the alcohol sector.

In Malawi, the group has agreed to offload its soft beverage unit, Southern Bottlers Limited (SOBO) to Coca-Cola Beverages Limited a subsidiary of Coca-Cola Beverages Africa.

“This acquisition expands the company’s portfolio in the strategic stout market and strengthens its historical partnership with Diageo in many other markets.

“Guided by its entrepreneurial spirit, Castel continues its growth momentum and its commitment to promoting the economic and social vitality of Cameroon and the African continent,” Gil Martignac of Castel noted.

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