Highlights
- Diageo sells 65 per cent stake in East African Breweries to Asahi Holdings for $2.3 billion (£1.7bn).
- Deal values EABL at $4.8 bn, making it Japan's largest investment in African alcohol sector.
- Transaction marks Diageo's complete exit from direct African beer holdings, expected to complete in late 2026.
Diageo, the world's largest spirits group, has agreed to sell its 65 per cent stake in East African Breweries (EABL) to Japan's Asahi Holdings for £1. 7 bn ($2.3 bn), marking its exit from direct African beer operations.
The transaction values EABL, a Nairobi blue chip stock and one of East Africa's top five companies by market capitalisation, at approximately $4.8 bn. The companies described it as the largest investment in an African alcohol business by a Japanese brewer.
EABL, which operates across Kenya, Tanzania and Uganda, is renowned for its Tusker beer brand, named after the elephant, that killed one of the brewery's founders during a 1923 hunting expedition.
Under the agreement, EABL will retain Tusker and other local brands while signing new contracts with Diageo to produce Guinness and selected spirits. The company will also import and distribute other Diageo products.
London-listed Diageo, which produces Johnnie Walker whisky and Captain Morgan rum, faces multiple challenges including tariff increases in its key US market, elevated debt levels and signs that younger consumers may be reducing alcohol consumption.
The company has committed to selling non-core assets to reduce debt and lower costs.
"This transaction delivers both significant value for Diageo shareholders and accelerates our commitment to strengthen the balance sheet," told interim CEO Nick Jhangiani to Reuters.
Market reaction proved positive, with Diageo shares rising 1.9 per cent and EABL shares climbing nearly 4 per cent following the announcement.
Jhangiani will return to his finance chief role in January when Dave Lewis, former Tesco CEO, assumes leadership as Diageo seeks to revive growth.
For Asahi, the acquisition aligns with its global expansion strategy targeting opportunities in Africa and South America.
President and CEO Atsushi Katsuki said EABL offers an exceptional portfolio of brands, marketing capabilities and production facilities. The deal is scheduled to complete in the second half of 2026.
