Diageo already operates JVs in Africa

Diageo already operates JVs in Africa

A bid by Diageo to run the UB Group's sorghum beer business in South Africa as part of a JV has moved a step closer after an agreement was signed. 

The UK-based company will pay US$36m for a 50/50 share in United National Breweries, Diageo said today (28 January). The other half will be held by a company affiliated to UB Group's chief, Vijay Mallya.

The deal follows Diageo's agreement to acquire a majority stake in UB's United Spirits in November, and a memorandum of understanding on United National Breweries signed at the same time.

The transaction is expected to complete in the first half of this year subject to consent from the South African competition authority.

Diageo already operates a cost-sharing JV in South Africa, Brandhouse Beverages, with Heineken and Namibia Breweries. Brandhouse is a marketing, sales and distribution company for premium alcohol beverages in the country. At the same time, Diageo and Heineken jointly own a brewery in Sedibeng near Johannesburg, which was opened two years ago.