Diageo plc announced that it will sell its 65% ownership of East African Breweries (EABL) to Japan’s Asahi Group Holdings for a net proceeds of approximately $2.3 billion, after tax and transaction costs. The transaction values EABL at an enterprise value of $4.8 billion and is expected to close in the second half of 2026, pending regulatory approvals in Kenya, Uganda, and Tanzania.
The deal marks a strategic pivot for Diageo away from non‑core beer operations in Africa. By divesting EABL, the company will reduce its leverage ratio from 3.1x EBITDA (as of December 2024) to roughly 2.85x, aligning with its target range of 2.5‑3.0x and freeing capital for higher‑margin premium spirits such as Johnnie Walker, Guinness, and Don Julio. Diageo will retain long‑term licensing agreements for its flagship brands, ensuring continued market presence without operational responsibility.
Asahi will assume full control of EABL’s operations in Kenya, Uganda, and Tanzania, and will maintain the company’s listing on the Nairobi, Kampala, and Dar es Salaam stock exchanges. The acquisition is Asahi’s first major investment in Africa and provides an immediate platform for growth in a region with a young population, rising disposable incomes, and expanding urbanization. Asahi’s president, Atsushi Katsuki, emphasized that the platform will enable sustainable growth and long‑term value creation while contributing to local economies.
Diageo’s interim CEO, Nik Jhangiani, highlighted the value created for shareholders and the company’s commitment to strengthening its balance sheet. He noted that the transaction delivers “significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet.” The sale also supports Diago’s broader “Accelerate” program, which seeks to streamline operations and focus on core, high‑margin businesses.
Market reaction to the announcement was positive, with Diageo’s shares trading up about 1% in pre‑market activity. Investors viewed the $2.3 billion cash influx and the expected leverage reduction as a clear step toward improving financial flexibility and supporting future growth initiatives.
The transaction underscores a broader trend of Diago’s divestments from African brewing operations, including exits from Ghana, Nigeria, Cameroon, Ethiopia, and Seychelles. It also signals Asahi’s ambition to expand its global footprint beyond Japan, leveraging EABL’s established distribution network and strong brand portfolio to capture growth opportunities in East Africa.
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