Diageo sells East African Breweries to Asahi for $2.3bn
Johnnie Walker owner Diageo has agreed to sell its controlling stake in East African Breweries Limited (EABL) to Japan’s Asahi Group Holdings in a deal valued at US$2.3 billion.
Diageo has entered into an agreement with Japanese beverage business Asahi to sell its subsidiary Diageo Kenya Limited, which holds 65% of the shares in EABL.
Once completed, the transaction will give Asahi control of EABL’s operations across Kenya, Uganda and Tanzania, subject to regulatory approvals in the relevant markets.
EABL is a regional leader in beverage alcohol, boasting a portfolio of brands across beer and spirits, including Chrome Vodka, Johnnie Walker, Captain Morgan and Smirnoff.
Although the business is concentrated on three core markets of Kenya, Uganda and Tanzania, its products are sold in more than 10 countries across Africa and beyond.
The transaction is expected to generate US$2.3bn for Diageo, after costs and taxes, and falls in line with the firm’s plan to focus on its core business and improve its financial health.
Nik Jhangiani, Diageo interim chief executive officer, said: “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 delivers both significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet. We remain committed to returning the group to well within our target leverage ratio range of 2.5 to 3.0 times [its earnings] 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 [United Spirits Limited] to conduct a strategic review of its ownership of RCB [Royal Challengers Bengaluru cricket team], represent material steps in delivering on this commitment.”
Also included in the sale is Diageo’s 53.68% directly owned shareholding in UDVK, a Kenya-based spirits producer and importer. EABL, which owns the other 46.32%, has management control and fully consolidates UDVK.
Under long-term licensing agreements included in the deal, EABL will continue to manufacture, distribute and sell several of Diageo’s global brands, including Guinness, Smirnoff, and Captain Morgan.
Atsushi Katsuki, president and group CEO, director and representative executive officer of Asahi, added: “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.”
In the fiscal year ending 30 June 2025, EABL reported net sales of US$996 million, and net income of US$94m, with net debt at US$229m.
Asahi expects EABL to remain listed on the Kenya, Uganda and Tanzania stock exchanges post completion, which is expected in the second half of 2026.
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