East African Breweries PLC (EABL) has issued a cautionary notice to its shareholders, investors, and the public following notification of an imminent transaction involving its parent company, Diageo PLC.
In a statement on Wednesday, December 17, the company warned that the proposed deal could materially affect the price of EABL’s securities and urged market participants to exercise caution as further announcements are awaited.
The EABL Board of Directors said it received formal communication from Diageo on Tuesday, December 16, regarding plans to sell its entire interest in Diageo Kenya Limited and UDV (Kenya) Limited to Asahi Group Holdings, subject to the fulfilment of regulatory conditions.
The Board noted that Diageo’s current shareholding means the transaction will result in a complete disposal of its stake in EABL.
"On the afternoon of Tuesday, December 16, 2025 the board of directors (Board) of East African Breweries PLC (EABL) received notification from its parent company Diageo plc (Diageo) of the imminent agreement to sell, subject to the satisfaction of certain regulatory conditions, its entire interest in Diageo Kenya Limited and in UDV (Kenya) Limited (UDVK) to Asahi Group Holdings, Ltd. (Asahi) (the Transaction).
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"Diageo owns 65% of the issued shares of EABL through its wholly-owned indirect subsidiary Diageo Kenya Limited, and 53.68% of the shares of UDVK through its wholly-owned subsidiary Diageo Great Britain Limited. As such, the Transaction will result in Diageo disposing of all of its stake in EABL," the statement read.
EABL further disclosed that public shareholders hold a significant portion of its shares, and that Asahi intends to seek regulatory exemptions related to takeover requirements in the region.
"35% of the issued shares of EABL are held by public shareholders (the General Shares). Diageo has notified the Board that Asahi intends to submit an application to the capital markets authorities in Kenya, Uganda and Tanzania seeking an exemption from the requirement to make a mandatory takeover offer for the General Shares," the statement added.
The Board said Diageo and Asahi will issue separate announcements on the transaction, after which EABL will publish a further statement in line with regulatory requirements.
"Diageo has notified the Board that it and Asahi will be making separate announcements regarding the Transaction and, once made, the Board will make a further announcement in compliance with the Capital Markets (Public Offers, Listing and Disclosures) Regulations, 2023," the statement further read.
EABL cautioned that the transaction could have a material effect on the trading price of its securities across regional exchanges and advised restraint until more information is released.
"The Transaction may have a material effect on the price of EABL's securities. Accordingly, until further announcements are made, EABL shareholders, investors and the public are advised to exercise caution when dealing in EABL's securities on the Nairobi Securities Exchange, the Uganda Securities Exchange and the Dar es Salaam Stock Exchange," the statement concluded.
In a statement earlier Wednesday, EABL said 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.
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.
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.
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