Diageo Weighs Guinness Spin-Off Amid Moet Hennessy Review

Diageo is considering a spin-off or sale of its beer brand Guinness while reviewing its stake in LVMH's Moet Hennessy. Possible actions include deepening ownership or exiting. LVMH is obligated to buy Diageo’s stake at a discount if sold. Guinness’s valuation exceeds $10 billion.

Diageo, renowned as the world's leading spirits producer, is reportedly deliberating the spin-off or sale of its iconic beer brand, Guinness. The company is also examining its current holding in the Moet Hennessy unit of LVMH. Bloomberg News disclosed these potential business moves citing insiders familiar with the proceedings.

The report highlights Diageo's strategic considerations, which include the possibility of increasing its investment in the Moet Hennessy partnership or completely withdrawing. Under an existing agreement, should Diageo decide to sell, LVMH is contractually bound to purchase Diageo's stake at a 20% discount from its appraised market value. According to Bloomberg, Guinness could attract a valuation exceeding $10 billion.

When contacted, Diageo did not provide immediate feedback, while LVMH chose not to offer any comments on the unfolding situation.

(With inputs from agencies.)