DIAGEO has turned to former Tesco chief executive Sir Dave Lewis as its new CEO, as investors circle the company and speculation mounts over Guinness.
Lewis is best known for rescuing Tesco from crisis a decade ago.
His appointment comes after a tumultuous period for Diageo, whose shares have fallen by more than a third this year amid slowing global sales and mounting calls from investors for structural change.
The company, whose portfolio includes Guinness, Johnnie Walker, and Smirnoff, is currently valued at under £40bn, less than half its 2021 peak.
City analysts now warn that Diageo’s weakened position could leave it vulnerable to activist investors or even a full-scale takeover bid.
At the heart of the storm is Guinness, Diageo’s strongest-performing brand and a key driver of its resilience in recent years.
The stout has been boosted by its surging global popularity in recent years and the success of Guinness Zero, the brand’s non-alcoholic option.
Analysts at UBS estimate Guinness could be worth as much as £14bn if spun off as a standalone business, a move some investors argue could unlock hidden value.
But others caution that selling the brand could undermine Diageo’s overall stability.
“Guinness is the jewel in Diageo’s crown,” said consumer analyst Chris Beckett of Quilter Cheviot, according to This Is Money.
“While a sale might attract a high price, it would strip away the one part of the business that’s growing. Without Guinness, Diageo’s broader portfolio would look considerably weaker.”
The stout’s cultural and economic importance in Ireland adds another layer of sensitivity.
Diageo has repeatedly denied any intention to sell or float Guinness, with chairman Sir John Manzoni reaffirming last week that the brand “is not for sale”.
Lewis replaces Debra Crew, who stepped down in July after two turbulent years as CEO.
Her departure followed a period of disappointing sales and investor unrest, particularly after the company misjudged post-pandemic demand trends and struggled with supply chain issues that even saw Guinness rationed in British pubs last Christmas.
Interim CEO Nik Jhangiani will continue to lead the company until year-end before resuming his role as chief financial officer.
Lewis’s arrival has been hailed as a major coup.
Known as “Drastic Dave” for his no-nonsense management style, he gained a reputation for cutting costs and refocusing brands during his time at Unilever and later at Tesco, where he stabilised the supermarket after an accounting scandal and slashed billions in debt.
In a statement, Sir John Manzoni said the board had conducted an extensive global search before selecting Lewis.
“Dave has the proven leadership experience and brand expertise needed to steer Diageo through this critical period.”
Lewis, who also chairs Haleon until December, said he was “delighted to be joining the team”, adding, “Guinness and Diageo are world-leading names with enormous potential. The market faces headwinds, but there are also great opportunities, particularly for iconic brands like Guinness that continue to resonate globally.”
Diageo’s broader spirits business continues to face headwinds, particularly in the US and China, where demand has softened.
Despite the uncertainty, markets responded positively to the leadership change, with Diageo shares rising 7% following the announcement.
Lewis will formally take up his new position on January 1.
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