Diageo has scrapped plans to lift its stake in Guinness Nigeria due to tough conditions in one of its biggest markets for the world-famous stout, the drinks company said on Wednesday, according Reuters.
The decision by Diageo, which makes Johnnie Walker Scotch and Smirnoff vodka, is another blow to Africa's biggest economy which is headed for its first full-year recession in quarter of a century following a plunge in oil prices.
Diageo said last year it planned to buy 15.7 percent of Guinness Nigeria for up to 41.37 billion naira, which would have taken Diageo's stake to 70 percent.
While the naira has since slumped after the central bank lifted a currency peg in June, Guinness Nigeria shares have also fallen to trade well below the price Diageo offered last year.
The company said on Wednesday it would not proceed with the offer, choosing instead to focus its resources on continuing to support Guinness Nigeria.
Last month, Diageo granted Guinness Nigeria a $95 million loan facility to help it cope with dollar shortages. The Nigerian subsidiary has only used $30 million so far.