Diageo has sold its 65% stake in East African Breweries Limited to Asahi for $2.3 billion, marking a strategic realignment for both companies.

Information on the Target

Diageo has officially announced the sale of its subsidiary, Diageo Kenya Limited, which holds a 65% stake in East African Breweries Limited (EABL), to Asahi for a substantial consideration of $2.3 billion. EABL is recognized as the preeminent beer producer in East Africa, boasting significant market shares in Kenya, Uganda, and Tanzania. The transaction also encompasses Diageo’s local spirits business, UDVK, further solidifying Asahi's entry into these burgeoning markets.

By selling EABL, Diageo not only capitalizes on its investment but also commits to long-term licensing agreements and transitional service arrangements with the company. EABL's diverse portfolio will continue to exist under local ownership, ensuring the production of certain Diageo brands, including spirits and ready-to-drink options like Guinness, will be maintained through refreshed agreements.

Industry Overview in Kenya

The beverage industry in Kenya has shown robust growth over the past decade, particularly in the beer segment, which is characterized by a growing youthful population and rising disposable incomes. Beer consumption in the region has