Diageo Faces Takeover Threat Amid Sales Decline
Drinks giant Diageo has again lowered its sales and profit forecasts due to weakening demand in China and the United States. The company, known for brands such as Guinness, Smirnoff, and Johnnie Walker, reported disappointing results that have pushed its shares to the lowest point in a decade.
Stock Market Impact
Diageo’s shares fell by 6.5%, or 117.5p, reaching 1680p—their lowest level since 2015. The stock has dropped one-third this year and nearly 60% since its peak in late 2021, reducing the company's market value to approximately £37.5 billion from a £90 billion high.
Leadership Uncertainty
The company is also experiencing leadership instability after the sudden exit of CEO Debra Crew in July. Despite intending to name a successor by the end of October, Diageo continues to operate under interim boss Nik Jhangiani.
Vulnerability to Takeover
Financial analysts suggest that the sharp decline makes Diageo attractive to takeover bids from investors looking to acquire its valuable brand portfolio at reduced prices.
“The strength and diversity of its portfolio and the share price decline very much leaves it vulnerable to an unwanted approach.” — Richard Hunter, Head of Markets, Interactive Investor
Summary
Diageo’s recent sales drops and leadership gaps have weakened its market position, exposing the company to potential takeover interest as its stock hits decade lows.
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