Diageo has 'no intention' to sell off Guinness or its stake in Moet Hennessy

Diageo is looking to sell Ciroc vodka, once backed by Sean 'Diddy' Combs, and could look to dispose of other underperforming labels

Sun, 26 Jan, 2025 - 16:12

Olivia Rudgard and Sabah Meddings

Diageo said it doesn’t plan to sell the Guinness beer brand or its stake in Moet Hennessy, even as pressure grows on the company to find ways to revive growth.

The British distiller said it was responding to reports over Guinness and its 34% stake in Moet Hennessy, luxury-goods conglomerate LVMH’s drinks division. In a statement, Diageo said:

We can confirm that we have no intention to sell either.

Bloomberg News previously reported that the company was reviewing its portfolio after shares slumped since chief executive officer Debra Crew took over a year and a half ago.

The range of possibilities under consideration includes a spin-off or sale of the iconic Irish brand Guinness, and either relinquishing its stake in the Moet Hennessy venture or taking greater ownership, according to people familiar with the matter.

Investors and analysts are expecting changes to be afoot at Diageo as the new chief financial officer, Nik Jhangiani, scrutinises the company — whose portfolio ranges from Scottish single malts to a champagne and cognac — as part of its minority stake in Moet Hennessy.

Diageo said it would next update the market with its interim results on February 4.

At that point, Ms Crew could well scrap or lower Diageo’s growth targets to reset expectations to a more realistic level, investors and analysts have said.

Diageo is already looking to sell Ciroc vodka, a brand once backed by music mogul Sean “Diddy” Combs, and could look to dispose of other subscale or underperforming labels.

There are a range of options being studied at an early stage.

Among the possibilities was a potential spin-off or sale of Guinness, which would likely be valued north of $10bn (€9.5bn), the sources said.

The company could run a dual-track process, weighing a listing while also gauging takeover interest, if it decides to proceed, they said.

The Moet Hennessy stake is also under review, the sources said.

Should Diageo seek to take full ownership of the joint venture, it would likely require a rights offer or the sale of its beer business, said Trevor Stirling, an analyst at Bernstein.

Former chief executive Ivan Menezes had always maintained that if Moet Hennessy became available, Diageo would be interested in buying it, he added.