By KT Reporter
Diageo has announced that it has agreed to sell its 100% shareholding in Diageo Kenya Limited, which holds a 65.00% interest in East African Breweries Limited (EABL), to Asahi.
The transaction also includes Diageo’s shareholding in the Kenyan spirits business, United Distillers Vintners Kenya (UDVK). Asahi is a Japan-listed global beverage leader with a diversified portfolio spanning beer, alcoholic and non-alcoholic beverages, and food.
The transaction includes Diageo’s 53.68% direct ownership in UDVK, a Kenya-based spirits producer and importer.
EABL owns the remaining 46.32% of UDVK, retains management control, and fully consolidates the business. EABL is the largest beer business in East Africa, with a heritage spanning more than a century and a strong growth track record across Kenya, Uganda, and Tanzania.
Asahi intends to preserve EABL’s well-loved local brands while introducing selected globally recognised brands from its portfolio to consumers in East Africa.
EABL benefits from state-of-the-art production facilities, an experienced Board and management team, and strong relationships with employees, local partners, and customers.
As part of the transaction, Diageo has committed to entering into long-term licensing and transitional services agreements with EABL. Locally owned brands will remain with EABL (including Tusker and Kenya Cane).
Updated agreements will enable EABL to continue producing certain Diageo spirits (such as Smirnoff and Captain Morgan) and ready-to-drink brands (including Smirnoff Ice and Orijin), as well as the iconic Guinness brand under licence, alongside the importation and distribution of Diageo’s international premium spirits.
Nik Jhangiani, Interim Chief Executive Officer of Diageo, said “We are incredibly proud of the achievements of EABL and our colleagues across Kenya, Uganda, and Tanzania. Together, EABL and Diageo have built the largest beer business in East Africa, driven by passionate people serving consumers and communities. We are excited to partner with Asahi through the continued licensing of Diageo brands in the region. This transaction delivers significant value for Diageo shareholders and accelerates our commitment to strengthening our balance sheet. We remain focused on returning the Group to well within our target leverage ratio of 2.5–3.0x through disposals of non-strategic, non-core assets, alongside positive operating leverage and disciplined capital allocation. This disposal, together with United Spirits Limited’s recently announced strategic review of its ownership of RCB, represents an important step in delivering on that commitment.”
Atsushi Katsuki, President and Group Chief Executive Officer of Asahi, added:
“This is a high-quality, market-leading business in Kenya, Uganda, and Tanzania, with an unrivalled brand portfolio, strong marketing capabilities, state-of-the-art production facilities, and leading market positions. Together with its excellent management team and employees, we will pursue sustainable growth and long-term enhancement of corporate value, while contributing to the development of local economies.”
The acquisition of EABL marks the first investment of this scale by a major Japanese brewing company in an African alcoholic beverage business. Asahi is well positioned to act as a responsible and experienced steward of EABL’s next phase of growth. Subject to regulatory approvals, completion of the transaction is expected in the second half of calendar year 2026.
Estimated net proceeds to Diageo, after tax and transaction costs, are approximately $2.3 billion, representing a multiple of 17x adjusted EBITDA and implying an enterprise value of $4.8 billion for 100% of EABL. The disposal is consistent with Diageo’s strategy of selectively divesting non-core assets to strengthen its balance sheet and support its commitment to deleveraging.
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