Said in the… spirits: samba by billions for Diageo ?


Diageo Plc, the multinational alcoholic beverages top-company, a giant player in spirits production and a major producer of beer and wine ( D. produces a number of world famous brands, including Johnnie Walker whisky, Smirnoff vodka, and Guinness beer.) is rumored to be a locked target by Brazilian billionaire Jorge Paulo Lemann and his company, 3G Capital (private-equity firm). Friday, indeed, the columnist Lauro Jardim of Veja, a Brazilian weekly news magazine published in São Paulo, reported that  Jorge Paulo Lemann is considering the possibility of a buyout offer alongside his partners Marcel Telles and Beto Sicupira at 3G Capital, but in the match can be an important ally also Warren Buffet by his Berkshire Hathaway Inc.
Lemann and his partners are often working with Warren Buffett’s Berkshire Hathaway Inc. and a main focus is on food and beverage. The 3G «orchestrated a deal last year to combine Burger King Worldwide Inc. with Tim Hortons Inc., a coffee-and-doughnut chain. It previously teamed up with Berkshire to acquire H.J. Heinz and is now merging that company with Kraft Foods Group Inc. Lemann and his partners also have profited from consolidation in the alcoholic beverage industry. They combined Latin American brewers, then engineered an $11 billion merger with Belgium’s Interbrew NV in 2004. In 2008, they led the $52 billion union with Anheuser-Busch Cos. to form the world’s largest beer manufacturer.

Brazilian billionaires Carlos Alberto Sicupira, Jorge Paulo Lemann and Marcel Herrmann Telles (PHOTO: Webb Chappell Photography)
Brazilian billionaires Carlos Alberto Sicupira, Jorge Paulo Lemann and Marcel Herrmann Telles (PHOTO: Webb Chappell Photography)

Diageo, based in London, has a market value of about 44 billion pounds ($68 billion). Buffett didn’t immediately return a message seeking comment left with an assistant».[1]

On the same Veja, another columnist-blogger, Geraldo Samor, focused his analysis on find out what kind of business-logic can be behind a combination of the manufacturer’s Johnnie Walker and Anheuser-Busch InBev (ABI), controlled by Brazilians[2]. Samor reported that, from many analysts’ point of view, the only consensus is that a transaction like this should be led by the brewery and not by 3G Capital, and anyway it looks a sort of strange-mixing of business missions not so properly easy to match. A sort of possible right-matching and maybe the logic in this operation could be the matching of ABI and Guinness (stand-alone?) about the leading quote in the African market of beer owned by ABI and, therefore, the opportunity to develop a strong entry for Guinness in this emerging market of beer consuming.

Diageo, brands
Diageo, brands

Will it be a deal involving  whole Diageo or just the owned brand Guinness (that could be sold as a stand-alone asset) or other way? For now, yesterday, shares in Diageo jumped  in a daily record performance after 2008.

[1] Quote: Bloomberg, in


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