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Diageo, a British alcoholic beverage giant, has cancelled its plan to increase its stake in Guinness Nigeria due to the challenging market conditions in Nigeria over the past year, according to a statement released at the Nigerian Stock Exchange on Wednesday.

In September 2015, Diageo announced that it had approached the Board of Directors of Guinness Nigeria with a N41.37 billion offer (worth $208 million at that time) to increase its controlling stake from 54.3 per cent to 70 per cent. However, macroeconomic conditions in Nigeria have further deteriorated since then. The country has slipped into a recession, inflation has spiked, and foreign exchange has become scarcer.

Following its decision to cancel its offer, Diageo said it will now focus on supporting Guinness Nigeria, which reported a full-year loss of N2.01 billion earlier this month for the first time in over 30 years.

“Diageo has confirmed that it maintains a positive outlook for Nigeria in the long-term and it expects the market to continue to grow,” the company said. “Nigeria remains a key strategic market for Diageo which remains supportive of Guinness Nigeria . . . its board and management and the actions taken by Guinness Nigeria to mitigate the impact of challenging market conditions.”

Diageo is the parent company of Guinness Overseas Limited and it produces world-class brands such as Johnnie Walker and Smirnoff, Baileys, among others.

Guinness Nigeria’s stock price, which has fallen by over 35 per cent in the past 12 months, closed at N97.99 per share at the end of trading on Wednesday.