UK-based drinks company Diageo has completed the sale of Jamaican lager Red Stripe to Heineken for $780.5m.
The deal, which was announced in October, entails Diageo offloading its brewing companies in Jamaica, Malaysia and Singapore, to Heineken.
Under the deal, Heineken acquired 57.9% stake in Diageo's Jamaican brewer Desnoes & Geddes, which produces Red Stripe and Dragon brands. The latest move takes Heineken's stake in the Jamaican assets up by 15.5% bringing the total ownership to 73.3%, reports The Drinks Business.
Heineken UK managing director David Forde was quoted by The Drinks Business as saying: "We are hugely excited about Red Stripe joining our premium beer portfolio.
"The beer has a rich heritage - from its links with music through the decades, to its famous cans and stubby bottles.
"Red Stripe brings with it a wealth of opportunities for our customers which we will support through brand investment and innovation."
Heineken will take control of Red Stripe from 1 January 2016. Customers will be able to place orders on Red Stripe and Dragon brands from Heineken from 30 December 2015. The first deliveries will begin to take place from 2 January 2016, reports The Drinks Business.
The Jamaican lager will join the likes of Desperados, Heineken, Tiger and Sol.
It is believed that Heineken will make a full bid in the near future to gain the full control over the Jamaican assets. The exchange of assets between Diageo and Heineken also includes the sale of Heineken's stake in Guinness Ghana Breweries to Diageo, More About Advertising reports.
Diageo plans to focus on its African business expansion, although there is speculation about Guinness' continuation in its portfolio as it accounts for less than 10% of group sales, as the company shifts it concentration on spirits, reports More About Advertising.
With the impending AB InBev-SABMiller merger that represents 30-40% world beer market, Heineken wishes to leave no stone unturned to remain competitive amidst the merger of its two biggest rivals.
In October, Diageo and Heineken announced plans to exchange brewing assets emerging markets, a move is intended to help Diageo generate a profit of £440m ($671m). Diageo announced divestments of its stakes in its joint ventures in Jamaica and Southeast Asia to Heineken in exchange of acquiring Heineken's stake in a drinks company in Ghana.
The companies also signed licensing agreements for their brands in Jamaica and Ghana, reported The Wall Street Journal. According to the firms, this arrangement would help them to put greater focus on their respective beer businesses.
