Diageo has reached an agreement to sell its shareholding in East African Breweries plc (EABL) to Asahi.
The disposal of Diageo’s 65% shareholding in EABL, which comes alongside an offload of its stake in Kenyan spirits business UDVK, had been widely anticipated as the London-listed drinks giant continues to pursue an ‘asset-light’ model in beer in Africa.
It was “consistent with Diageo’s strategy of appropriate and selective disposals of non-core assets, strengthening the balance sheet and supporting our previously shared commitment to de-lever”, the Johnnie Walker owner said in a statement.
Subject to regulatory approvals, the deal is expected to complete in the second half of calendar year 2026.
Diageo said it expected the net proceeds after tax and transaction costs to amount to $2.3bn, equivalent to a 17x multiplier of EABL’s adjusted EBITDA.
This implied an enterprise value for EABL of $4.7bn, it added.
The acquisition of EABL represents the first time a major Japanese brewing business has made an investment of this size in an African alcohol beverage business. EABL is the largest beer business in East Africa and produces popular local brands including Tusker.
Asahi was a “strong, responsible and experienced steward for the next phase of growth for EABL”, Diageo said.
“We are incredibly proud of the achievements of EABL and our colleagues across Kenya, Uganda and Tanzania,” said Diageo interim CEO Nik Jhangiani. “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.”
The deal was “another step towards an asset-light approach towards beer in Africa”, said analysts at Jefferies.
It is the latest in a series of offloads from Diageo in beer in Africa.
In January, the group struck a deal to sell its stake in the publicly listed Guinness Ghana Breweries to French drinks group Castel for $81m. It had previously sold its Guinness brewing business in Cameroon to Castel in 2022.
Last year, it sold its shareholding in the publicly-listed listed Guinness Nigeria to Singapore-based consumer group Tolaram.
Diageo’s asset-light approiach in Africa “should reduce volatility… drive higher margins and returns under licensing agreements”, Jeffries analysts added.
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