Diageo has entered into an agreement to acquire a 50% interest in the company that owns United National Breweries' traditional sorghum beer business in South Africa for approximately 23 million pounds. The seeds of the deal were sewn back in November 2012 when Diageo and United National Breweries chairman Vijay Mallya announced they had entered into a "memorandum of understanding" under which they would form the 50-50 joint venture. Today's confirmation reported that the remaining 50% will be held by a company affiliated to Mallya.
The transaction is conditional on, among other things, consent from the South African competition authority and is expected to be completed in the first half of this year.
Diageo's shares lifted marginally on the news and have reached more than 1,860 pence -- putting on almost 60 pence since I earmarked them as a potential buying opportunity less than two weeks ago, suggesting that there are still growth prospects within this drinks Goliath.
If you're looking for other defensive investments in the FTSE 100, take a look at this special free report from The Motley Fool, updated for 2013. The report contains the names of the blue-chip companies favored by the super investor who has regularly beaten the Footsie with a collection of dependable, defensive, dividend-paying FTSE 100 names. Simply click here to have your copy delivered immediately to your inbox.
Sam owns shares in Diageo. Motley Fool newsletter services have recommended buying shares of Diageo. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.