Diageo has agreed to sell its controlling stake in East African Breweries plc (EABL) and its shareholding in the Kenyan spirits business UDVK to Japan’s Asahi Group Holdings in a transaction valued at an estimated $2.3bn (£1.8bn), marking one of the most significant foreign investments in Africa’s alcohol beverage industry.
The British drinks giant said the deal involves the sale of its 100% shareholding in Diageo Kenya Limited, which holds a 65% stake in EABL, as well as its interests in UDVK, a Kenya-based spirits producer and importer.
The transaction is subject to regulatory approvals and is expected to be completed in the second half of 2026.
Diageo said the disposal is consistent with its strategy of selectively selling non-core assets to strengthen its balance sheet and reduce leverage, while continuing to focus on long-term growth through capital discipline and operational performance.
According to the company, the sale is expected to generate net proceeds of approximately $2.3bn after tax and transaction costs. The valuation implies a multiple of 17 times adjusted EBITDA and an enterprise value of $4.8bn for 100% of EABL.
Diageo said the transaction would reduce its leverage by around 0.25 times, supporting its stated aim of returning to a target leverage ratio of between 2.5 and 3.0 times.
EABL is the largest beer business in East Africa, with operations in Kenya, Uganda and Tanzania, and a heritage spanning more than a century.
Its portfolio includes a range of beer, spirits, ready-to-drink and non-alcoholic brands that are deeply embedded in the region’s consumer markets.
As part of the transaction, Diageo said it has committed to entering into long-term licensing agreements with EABL to ensure the continued production and distribution of key brands, including Guinness, selected local spirits and ready-to-drink products, as well as the distribution of Diageo’s international premium spirits.
Locally owned brands such as Tusker and Kenya Cane will remain under the ownership of EABL.
Refreshed agreements will allow EABL to continue producing certain Diageo spirits, including Smirnoff and Captain Morgan, alongside ready-to-drink brands such as Smirnoff Ice and Orijin.
Guinness will continue to be produced under license, while EABL will also import and distribute Diageo’s international premium spirits portfolio.
The deal also includes Diageo’s 53.68% directly owned stake in UDVK. The remaining 46.32% of UDVK is held by EABL, which has management control and fully consolidates the business.
Diageo said the transaction reflects its broader efforts to simplify its portfolio and accelerate balance sheet strengthening through the disposal of non-strategic assets.
The company highlighted the sale alongside recent steps by its Indian subsidiary, United Spirits Limited, to conduct a strategic review of its ownership of Royal Challengers Bengaluru, describing both actions as material progress towards its financial objectives.
Nik Jhangiani, Interim Chief Executive Officer of Diageo, said the company was proud of EABL’s legacy and performance across East Africa.
“We are incredibly proud of the achievements of EABL and our colleagues across Kenya, Uganda and Tanzania,” he said.
“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.”
Mr Jhangiani added that the transaction would deliver significant value for Diageo shareholders while accelerating its commitment to strengthening the company’s balance sheet and maintaining financial discipline.
Asahi described the acquisition as a landmark investment and its first of this scale in Africa’s alcohol beverage sector. The Japanese group said EABL’s strong brand portfolio, market leadership and production capabilities made it a compelling platform for long-term growth.
Asahi Group Holdings President and Chief Executive Officer Atsushi Katsuki said EABL is a high-quality business with leading positions across Kenya, Uganda and Tanzania, supported by strong brands, marketing capabilities and modern production facilities.
He said Asahi intends to preserve EABL’s locally loved brands while introducing globally recognized names from its portfolio to consumers across East Africa.
The group also pointed to EABL’s experienced management team and strong relationships with employees, customers and local partners as key strengths supporting future growth.
Diageo said it will also enter into transitional service agreements to ensure continuity during the ownership change. The company emphasized that the transaction is designed to safeguard long-term brand availability and operational stability in the region.
Once completed, the deal will mark a significant shift in ownership for one of East Africa’s most prominent consumer goods companies, while underlining growing international interest in Africa’s fast-expanding beverage markets.
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