Diageo to Exit EABL After 25 Years in Sh296 Billion Sale to Japan’s Asahi

UK-based global brewing giant Diageo has agreed to sell its 65 per cent stake in East African Breweries Limited (EABL) to Japan’s Asahi Group Holdings in a deal valued at $2.3 billion (Sh296.59 billion), marking one of the largest foreign investments by a Japanese brewing company in Africa.

The transaction, announced on Tuesday, will also see Diageo dispose of its shareholding in Kenya’s spirits business, United Distillers Vintners Kenya (UDVK), to the Tokyo-headquartered beverage group. The sale, expected to be completed in the 2026 calendar year, signals the end of Diageo’s nearly 25-year majority ownership of EABL.

Diageo took control of EABL in 2000 following the merger of Guinness Plc—then a minority shareholder—and Grand Metropolitan in 1997.

Following the announcement, EABL shares rallied sharply at the Nairobi Securities Exchange, rising seven per cent on Wednesday afternoon to trade at Sh251.25 on December 16. The stock later hit a new 52-week high of Sh252.00.

The deal values EABL at approximately $4.8 billion (Sh620 billion), effectively transferring Diageo’s controlling interest in East Africa’s largest brewer to the Tokyo-listed Asahi Group.

Diageo Kenya Limited currently holds 65 per cent of EABL, alongside Diageo’s interests in United Distillers Vintners Kenya. Under the terms of the transaction, Asahi will become the majority owner of EABL and assume control of operations across Kenya, Uganda, and Tanzania. The Japanese firm has indicated it will preserve established local brands while introducing globally recognised names from its portfolio into the East African market.

“This acquisition marks a significant step in accelerating our growth ambition of becoming the most celebrated beverage business in Africa. The new majority owner brings significant knowledge and expertise in innovation and growing successful brands globally that will help us achieve that ambition,” said EABL Managing Director and CEO Jane Karuku.

The transaction also includes Diageo’s 53.68 per cent direct stake in UDVK, a Kenya-based spirits producer and importer. EABL owns the remaining 46.32 per cent of UDVK and will retain management control, fully consolidating the business.

From early 2020, Diageo has been steadily exiting direct ownership of beer production assets across several markets, opting for an “asset-light” strategy focused on brand licensing and spirits distribution rather than capital-intensive brewing operations.

In Kenya, however, Diageo had moved in the opposite direction in recent years. In 2023, the company increased its stake in EABL to the current 65 per cent after launching a partial tender offer in October 2022.

Diageo’s interim Chief Executive Officer, Nik Jhangiani, said the transaction delivers strong value for shareholders while supporting the company’s balance sheet objectives.

“We are incredibly proud of the achievements of EABL and our colleagues across Kenya, Uganda and Tanzania. EABL and Diageo have built the largest beer business in East Africa, a testament to driven people with a passion for the consumers and communities they serve. We are excited to partner with Asahi through the licensing of Diageo brands in the region going forward,” said Jhangiani.

He added: “We remain committed to returning the Group to well within our target leverage ratio range of 2.5–3.0x through disposals of non-strategic, non-core assets, alongside delivering positive operating leverage, and tighter capital discipline.”

Asahi President and Group Chief Executive Officer Atsushi Katsuki said the acquisition aligns with the company’s long-term growth strategy and commitment to regional development.

“This business is a high-quality, leading company in Kenya, Uganda and Tanzania, with an unrivalled brand portfolio and marketing capabilities, state-of-the-art production facilities and strong market shares,” said Katsuki.

The transaction remains subject to regulatory approvals from relevant government agencies. Diageo has committed to entering long-term licensing agreements with EABL to ensure the continued production and distribution of Guinness, local spirits, ready-to-drink brands, and Diageo’s international spirits portfolio.

The acquisition represents the first time a major Japanese brewing company has made an investment of this scale in Africa’s alcohol beverage industry.