Diageo has struck a deal to offload its controlling interest in East African Breweries Plc to Japan’s Asahi Group Holdings, in a transaction that places an implied enterprise value of about US$4.8 billion, roughly KSh 618.7 billion, on East Africa’s biggest brewer.
Under the agreement, the UK-based drinks giant will sell its entire stake in Diageo Kenya Limited, which holds 65 per cent of EABL, together with its direct shareholding in UDV Kenya, the local spirits producer and importer. The buyer, Asahi Group Holdings Ltd, is a Tokyo-listed global beverage firm with a wide footprint spanning beer, spirits, soft drinks and food.
Diageo expects to receive net proceeds of around US$2.3 billion, equivalent to about KSh 296.5 billion, representing a valuation multiple of 17 times adjusted EBITDA.
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EABL, which has operated for more than a century, runs brewing and spirits businesses across Kenya, Uganda and Tanzania. It remains the dominant player in the regional beer market, backed by modern manufacturing plants and an extensive distribution network.
Asahi said the acquisition provides a strategic gateway into Africa’s alcoholic beverages market and marks the first large-scale investment by a major Japanese brewer on the continent. For Diageo, the sale is expected to cut group leverage by approximately 0.25 times, helping it stay within its target leverage range of between 2.5 and 3.0 times.
Despite relinquishing control, Diageo will maintain a commercial footprint in East Africa through long-term licensing and transitional service agreements with EABL. These will ensure continued production and distribution of Guinness, selected Diageo spirits and ready-to-drink products, alongside the import and distribution of Diageo’s international premium spirits. Home-grown brands such as Tusker and Kenya Cane will remain with EABL.
EABL currently owns 46.32 per cent of UDV Kenya, with the remaining 53.68 per cent, held by Diageo, included in the sale.
The move follows Diageo’s recent announcement of a strategic review of its holding in United Spirits Limited in India, as well as its association with the Royal Challengers Bengaluru cricket franchise.
