Diageo sells East African Breweries stake to Asahi for US$2.3bn
Diageo is exiting one of its last major African brewing assets as part of its drive to cut debt and sharpen its portfolio. The deal marks the largest-ever investment by a Japanese brewer in an African alcohol business.
Diageo is selling its entire holding in East African Breweries to Asahi for US$2.3 billion. This controlling stake represents 65% of the shares in EABL, which is listed on the Nairobi stock market.
The deal, which values EABL at US$4.8 billion and is expected to be finalised in the second half of next year, also includes Diageo’s shareholding UKDV.
Shares in Diageo jumped by 2.3% on the announcement.
Major deal for African brewing sector
EABL is the largest brewer in Eastern Africa with popular brands such as Tusker and the sale represents the first time a major Japanese brewer has made an investment of this size in an African alcohol beverage business.
In the fiscal year ended 30 June 2025, EABL reported net sales of US$996m and net income of US$94m, with net debt at US$229m.
Guinness and spirits to remain under licence
While Diageo has been selling off African breweries such as those in Nigeria and Ethiopia, it has always retained the Guinness brand and has entered into local licensing arrangements with the new owners such as Castel.
This remains the case with the sale of EABL as Diageo will forge long-term licensing agreements with Asahi to secure the continued production and distribution of Guinness, local spirits and ready-to-drink brands, as well as the distribution of Diageo’s portfolio of international spirits.
Part of wider balance sheet strategy
Diageo says the sales are “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.”
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Interim CEO, Nik Jhangiani, said: “This transaction delivers both significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet.
“We remain committed to returning the group to well within our target [debt] leverage ratio range of 2.5 to 3.0x through disposals of non-strategic, non-core assets, alongside delivering positive operating leverage, and tighter capital discipline.”
Further asset sales under review
It had been widely speculated that Diageo would sell EABL. In addition it is conducting a strategic review of its ownership of the Royal Challengers Bangalore Indian Premier League cricket franchise.
The team, which won the title last year, is said to have a queue of interested buyers and could attract a sale price of up to $2 billion. A sale is widely expected before the new season begins in April.
New CEO expected to intensify portfolio review
New Diageo CEO, the former Tesco head Dave Lewis, takes over at Diageo in January but it is improbable that the sales of East African Breweries took place without his blessing.
Known as “Drastic Dave”, he is expected to take a deep look at Diageo’s portfolio to identify any underperforming brands and seek sales to further improve returns on capital and shareholder earnings.
Asahi signals long-term ambitions
Atsushi Katsuki, president and CEO of Asahi, said EABL offers an unrivalled portfolio of brands, marketing capabilities and production facilities.
“We will pursue sustainable growth and medium- to long-term enhancement of corporate value,” Katsuki said.
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