UK-based alcoholic beverages company Diageo has announced that it will restructure its joint ventures with Heineken and the Ohlthaver & List (O&L) Group of Companies in South Africa and Namibia.

Once the move is completed, Diageo will operate in the two countries through wholly-owned subsidiaries.

As a part of the deal, Diageo has agreed to sell its 42.25% equity stake in DHN Drinks (Proprietary). It will also divest its 25% equity stake in the Sedibeng brewery in South Africa’s Gauteng to NBL and its 15% stake in NBL to Heineken. The company will transfer the associated shareholder loans for both the companies to Heineken.

Diageo also intends to buy the shares that it does not already own in the beer and spirits sales and marketing joint venture in South Africa, the brandhouse Beverages (Proprietary).

Upon completion of the transaction, the company is expected to receive a total net cash consideration of ZAR2.5bn (around £128m).

Diageo CEO Ivan Menezes said: "We have worked very successfully with Heineken and NBL throughout our partnership, growing the beer business and establishing market leadership in spirits.

"From this leadership position we now believe that Diageo has the necessary scale to move to the next stage of growth for spirits, RTDs and our beer and cider portfolio in a focused, simplified ownership structure."

Heineken CEO and chairman of the Heineken executive board Jean-François van Boxmeer said: "Our new structure allows us to focus solely on the beer category and strengthens our platform for continued growth."