DGE Diageo Plc

By Tapan Panchal

LONDON--U.K. alcoholic beverages company Diageo PLC (DGE.LN) said Thursday that it will acquire full control of a traditional sorghum beer business in South Africa.

Diageo, which owns the Smirnoff vodka and Johnnie Walker scotch whisky brands, agreed to acquire the remaining 50% interest in the company that owns United National Breweries' traditional sorghum beer business in South Africa. It will acquire the stake from Pestello Investments Inc. for an initial payment of $22 million and a potential earn-out payment of up to $14 million.

The acquisition is expected to be completed in the current fiscal year. Diageo acquired its 50% stake in the South African beer business in January 2013.

Pestello Investments is a company affiliated with Indian businessman Vijay Mallya.

Write to Tapan Panchal at tapan.panchal@wsj.com

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