The Board of Directors of East African Breweries PLC (EABL) has announced that Diageo PLC has agreed to sell its majority stake in EABL, alongside its shareholding in the Kenyan spirits business, UDV (Kenya) Limited, to Japan’s Asahi Group Holdings.
In a statement on Wednesday, December 17, EABL said the deal represents the first time a Japanese brewing multinational has made an investment of this scale in an African alcohol beverage business.
Under the terms of the transaction, Asahi will assume majority ownership of EABL, taking control of operations across Kenya, Uganda, and Tanzania.
Additionally, Asahi is expected to retain EABL’s well-established local brands while gradually introducing globally recognised brands from Asahi’s international portfolio to consumers in East Africa.
Financially, the transaction values EABL at an implied enterprise value of approximately $4.8 billion (Ksh619 billion) for 100 per cent of the business.
Read More
Diageo is expected to receive estimated net proceeds of $2.3 billion (Ksh296.5 billion) after tax and transaction costs, based on a multiple of 17 times adjusted EBITDA.
EABL said the transaction reflects strong confidence in the long-term growth prospects of both the company and the wider East African region, citing favourable demographic trends and economic fundamentals.
The company noted that it expects to continue flourishing under its new majority owner, building on its existing strengths.
Commenting on the deal, EABL Managing Director and Chief Executive Officer Jane Karuku said the acquisition aligns with the company’s long-term growth ambitions.
"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," she said.
Interim Chief Executive Officer Nik Jhangiani praised EABL’s performance and outlined Diageo’s rationale for the disposal.
"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.
"This transaction both delivers significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet, 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. This disposal, alongside the recent announcement by USL to conduct a strategic review of its ownership of RCB, represent material steps in delivering on this commitment," he said.
Asahi also expressed confidence in EABL’s market position and future prospects with Group President and Chief Executive Officer Atsushi Katsuki highlighting the company’s strengths and the strategic importance of the acquisition.
"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.
"Together with its excellent management team and employees, we will pursue sustainable growth and medium- to long-term enhancement of corporate value, while contributing to the development of the local economies," he stated.
The transaction is subject to regulatory approvals from relevant government agencies and is expected to be completed in the 2026 calendar year.
EABL said there will be no changes to its operations or workforce as a result of the deal, and no jobs are expected to be affected.
In the interim period, Diageo will continue to support Asahi to ensure a smooth transition and successful transfer of operations.
This comes over a year after EABL made a Ksh190 million commitment towards the restoration of water towers in Kenya.
The money is meant to help mitigate the effects of climate change, reduce carbon emissions and reduce water scarcity, as the country marks World Water Day on Friday, March 22.
EABL made the first commitment on Tuesday, March 19, 2024 when Debra Crew, the CEO of Diageo (EABL’s parent company) met President William Ruto at State House, Nairobi.
"We are working with the private sector to create an enabling environment for business, trade and agriculture to thrive. Additionally, the partnership is helping to solve socio-economic challenges in the country.
"Met Diageo CEO Debra Crew at State House Nairobi. The company donated $1 million (KSh130 million) for environmental conservation and mitigating the effects of climate change. Ms Crew was accompanied by East African Breweries Group Managing Director and CEO Jane Karuku," Ruto said.
-1758009840.jpg)
