Guinness owner has issued an update after rumours that it was looking to sell the brand circulated online.
The Irish Stout owner Diageo published a statement on Sunday evening denying that it was putting Guinness up for sale. The drinks giant also rejected claims that its stake in the champagne and cognac business Moet Hennessy could also be put up for sale.
The rumours circulated after a report from Bloomberg Business Newswire service. That report claimed a disposal programme was being considered, citing “unnamed” sources. This included a potential spin-off or sale of Guinness, among a range of possibilities.
Analysts had suggested that Guinness could fetch up to $10billion (£8billion) if it was sold or spun off. The rumours also sent Diageo shares up more than 4% on Friday. However, the business soon stepped in and confirmed that Guinness was not up for sale.
In the statement, Diageo said: “We note the recent media speculation around the Guinness brand and our stake in Moet Hennessy and we can confirm that we have no intention to sell either. We will next update the market with Interim results on February 4 and we look forward to hosting our Guinness investor and analyst day on May 19/20.”
The Bloomberg report surprised some, as Guinness is one of Diageo’s top brands and one of its most profitable. Although, it had been noted that Guinness was an outlier in Diageo’s business portfolio, which consists mostly of spirits rather than beer. Diageo owns more than 200 brands, including Johnnie Walker, Smirnoff and Captain Morgan.
Recently, Guinness sales have skyrocketed due to increased demand from younger drinkers. Just before Christmas, the brewer was forced to ration the stout due to the heightened demand.
Reports of the sell-off came at a testing period for Diageo boss Debra Crew, who has seen the company’s shares decline under her leadership over the past year and a half. In November, Diageo shares hit their lowest level since 2017. The company has already reportedly looked at the potential sale of its Pimms liqueur and Ciroc vodka brands over the past year. Diageo said it would next update the market when it issued its half-year results on February 4. It will also hold an investor and analyst day for the Guinness brand in May.
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