Diageo completes acquisition of Meta Abo Brewery, Ethiopia

Diageo plc, the world’s leading premium drinks business, has completed the acquisition of the Meta Abo Brewery Share Company SC (‘Meta Brewery’), a leading beer company in Ethiopia, for a cash consideration of USD225 million, subject to customary post completion adjustments. The acquisition concludes a competitive tender process held by the Privatization and Public Enterprises Supervising Authority on behalf of the Government of Ethiopia.

Nick Blazquez, President, Diageo Africa, said:

“I am delighted that we are able to announce the completion of this acquisition which represents a key milestone in achieving our strategy of participating at scale in beer and spirits in growth markets in Africa. Meta is a strong national brand that has great heritage in Ethiopia. We will invest behind the long-term growth of the brand, the Meta business, and the wider communities in Ethiopia.

“Over the past five years, Diageo has invested more than GBP 1 billion in building its businesses in Africa, and we will continue to look at opportunities to expand our footprint, grow our brands and secure strong routes to market.”

Meta Brewery is the second largest beer company in Ethiopia with a volume share of approximately 15%*. From its brewery near the Ethiopian capital Addis Ababa, it produces and distributes its flagship national lager brands Meta and Meta Premium.

The acquisition will give Diageo direct access to the rapidly growing Ethiopian beer market, and will complement Diageo’s existing premium spirits business in the country. The beer market in Ethiopia is estimated to continue to grow at more than 10% per annum to 2015, driven by strong GDP growth and increased disposable incomes*. Diageo currently markets its international premium spirits brands, including Johnnie Walker scotch whisky, Smirnoff vodka and Gordon’s gin, through its representative office in Addis Ababa.

Diageo is also announcing the appointment of Francis Agbonlahor as Managing Director for the Meta business. Francis joins from Diageo’s business in Nigeria and takes up the role with immediate effect.

Ekwunife Okoli, Managing Director, Africa Regional Markets, added:

“We recognise the huge potential in Ethiopia and understand the market through our current spirits operation. It’s an exciting place to do business and we are delighted to be owners of such a prestigious brand. Through combining the strength and heritage of Meta with our international brand and innovation credentials, we will grow the brand and the business. We want Meta to be enjoyed by more consumers across Ethiopia and beyond. We are delighted to welcome our new colleagues to the Diageo family, and look forward to growing our relationships to make a bigger contribution.

“We are also pleased to announce the appointment of Francis Agbonlahor as Managing Director of our new business. Francis brings significant experience from one of Africa’s biggest beer markets, and his knowledge of leading supply operations will add huge value to the business. I know Francis looks forward to working closely with the Senior Management Team at Meta to lead the future of the Meta business.”

The transaction also represents a significant investment from the UK into Ethiopia, contributing on a number of levels to the Ethiopian Government’s Growth and Transformation Plan. These include supporting local agricultural development, investing in and stimulating a competitive beer industry, and researching options to increase product exports. Diageo will also look to extend its Water of Life initiative in Ethiopia. The initiative currently provides access to clean drinking water for over 60,000 Ethiopians in the Kechene and Burko Gudo districts.

Commenting on the acquisition, UK Minister for Trade and Investment, Lord Green, said:

“Sub-Saharan Africa is not only a trillion dollar market, but the IMF forecasts it will have seven of the world’s ten fastest-growing economies over the next five years. Within this market, Ethiopia represents a great opportunity, and I hope that where Diageo leads, other UK firms will follow. I congratulate Diageo on this move and I wish them every success with their investment.”

Source: *Access Capital, 2011