Diageo sells Kenyan business to Asahi, exits East Africa

Diageo has agreed to sell its 100 percent shareholding in Diageo Kenya Limited, which holds a 65 percent stake in East African Breweries Limited (EABL), to Asahi Group Holdings. The deal also includes Diageo’s 53.68 percent direct shareholding in UDV Kenya (UDVK), a local spirits producer and importer. EABL, which owns the remaining 46.32 percent of UDVK, maintains management control and fully consolidates the business.

The transaction values 100 percent of EABL at an enterprise value of 4.8 billion dollars. This marks the first major investment by a Japanese brewing company of this scale in Africa’s alcoholic beverage sector.

Asahi, a Tokyo-listed global beverage company, produces a broad range of beer, alcoholic and non-alcoholic drinks, and food products. Through this acquisition, the group aims to strengthen its presence in Africa by combining its global portfolio with EABL’s established local brands.

EABL, the largest beer business in East Africa, operates in Kenya, Uganda and Tanzania, and has built a strong growth record over the past century. Asahi plans to retain EABL’s local brands while gradually introducing its international labels to East African consumers. The company’s facilities, leadership and relationships with local partners and customers will remain key to its regional success.

Following the sale, Diageo will enter into long-term licensing and transitional service agreements with EABL. Locally owned brands such as Tusker and Kenya Cane will remain under EABL’s ownership. Refreshed agreements will allow EABL to continue producing Diageo’s global brands, including Smirnoff, Captain Morgan and Guinness, as well as managing the import and distribution of Diageo’s premium spirits.

Nik Jhangiani, Interim Chief Executive Officer of Diageo: “We are incredibly proud of the achievements of EABL and our colleagues across Kenya, Uganda and Tanzania. 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. We remain committed to returning the Group to well within our target leverage ratio range of 2.5 to 3.0 times through disposals of non-strategic, non-core assets, alongside delivering positive operating leverage and tighter capital discipline,” Jhangiani added.

Atsushi Katsuki, President and Group Chief Executive Officer of Asahi: “This business is a high-quality, leading company in Kenya, Uganda, and Tanzania, with an unrivalled brand portfolio and marketing capabilities, state-of-the-art production facilities and strong market shares. Together with its excellent management team and employees, we will pursue sustainable growth and medium- to long-term enhancement of corporate value, while contributing to the development of the local economies.”

www.asahigroup-holdings.com

www.diageo.com

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