Diageo PLC exits East Africa’s beer market

In Uganda, EABL owns approximately 98.3% of Uganda Breweries Limited (UBL), alongside full ownership of International Distillers Uganda (IDU) and East African Maltings Uganda Limited

Kampala, Uganda | THE INDEPENDENT | Diageo PLC, the world’s largest spirits group, has agreed to sell its 65% stake in East African Breweries to Japan’s Asahi Holdings for $2.3bn.

The deal also includes Diageo’s 53.68% directly held stake in United Distillers Vintners Kenya (UDVK), a leading spirits producer and importer, while EABL retains 46.32% ownership and management control over UDVK. The transaction, however, is subject to regulatory approvals from capital markets authorities across the region.

EABL is the largest brewer in East Africa, with operations spanning Kenya, Uganda, Tanzania and Rwanda. The company shut its South Sudan facility and depot nearly a decade ago due to huge currency losses owed to a sustained political instability in Africa’s newest nation.

The company has a heritage dating back over a century and has consistently delivered a strong growth trajectory across the region. Its portfolio includes iconic brands such as Tusker, Pilsner, Kenya Cane, Bell Lager, and Guinness, which have been central to its sustained market leadership.

Under the acquisition, Asahi, a globally recognised beverage conglomerate with a diverse portfolio encompassing beer, spirits, non-alcoholic beverages, and food products, will assume majority ownership of EABL.

The Japanese company has stated its intention to preserve EABL’s iconic local brands while gradually introducing internationally recognised products to East African consumers.

Atsushi Katsuki, President and CEO of Asahi, described the deal as an opportunity to partner with “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.”

EABL’s operations and ownership structure

EABL’s footprint across East Africa is structured through a combination of wholly-owned subsidiaries and strategic shareholdings, a model that has enabled it to consolidate market share and leverage operational synergies.

In Kenya, EABL fully owns Kenya Breweries Limited (KBL), the core brewing entity responsible for a significant share of the company’s revenue. The company also holds 46.32% of UDVK, with Diageo’s former share now transferring to Asahi, while EABL maintains operational management of the spirits business.

In Uganda, EABL owns approximately 98.3% of Uganda Breweries Limited (UBL), alongside full ownership of International Distillers Uganda (IDU) and East African Maltings Uganda Limited, integrating upstream and downstream operations. In Tanzania, EABL controls around 85% of Serengeti Breweries Limited, one of the country’s leading brewing companies, while in Rwanda, it fully owns East African Breweries Rwanda Limited and maintains a 99% stake in East African Beverages South Sudan Limited.

Financial performance

EABL has maintained strong financial performance, reporting net sales of $996 million, EBITDA of $258 million, and net income of $94 million for the fiscal year ended 30 June 2025, with net debt standing at $229 million.

The company is expected to remain listed on the Nairobi, Uganda, and Tanzania stock exchanges post-transaction, preserving its local investor base while welcoming Asahi as the new majority shareholder.

For Diageo, the divestment represents a strategic move to optimise its global portfolio and strengthen its balance sheet.

Nik Jhangiani, Interim CEO of Diageo, emphasised the significance of the transaction, saying, “EABL and Diageo have built East Africa’s largest beer business, a testament to the dedication of our teams and the trust of our consumers. Partnering with Asahi through licensing ensures that Diageo brands continue to thrive while we focus on strengthening our global balance sheet.”

Diageo has committed to long-term licensing and transitional service agreements with EABL, ensuring continuity for globally recognised brands such as Smirnoff, Captain Morgan, Smirnoff Ice, Orijin, and Guinness, which will continue to be produced and distributed under licence. Local brands, including Tusker and Kenya Cane, will remain fully owned by EABL, safeguarding the company’s heritage and customer loyalty.

Implications for the E.A’s beverage sector

The transaction signals a major shift in the East African beverage landscape. Asahi’s entry introduces a globally recognised strategic partner to the region, capable of leveraging EABL’s strong operational infrastructure and extensive distribution networks. The deal may accelerate premiumisation, product innovation, and cross-border distribution of international brands, while maintaining EABL’s local identity and operational leadership.

For investors and market observers, the acquisition highlights the growing appeal of East Africa as a strategic hub for beverage companies. By combining EABL’s established regional presence with Asahi’s global portfolio and expertise, the company is poised to sustain growth while enhancing shareholder value across Kenya, Uganda, Tanzania, Rwanda, and South Sudan.

Asahi’s CEO Atsushi Katsuki added, “This business is a high-quality, leading company with unparalleled brand equity and operational capabilities. Together with the management team, we aim to deliver sustainable growth and long-term corporate value while contributing to local economic development.”

Looking forward

With Asahi as the new majority shareholder and Diageo continuing through licensing agreements, EABL is well-positioned to maintain its market leadership in East Africa. The transaction ensures continuity of beloved local brands, preserves operational expertise, and introduces new global offerings, creating a balanced approach to growth. For the broader East African beverage sector, the deal represents both consolidation and an opening for strategic innovation, shaping the region’s market dynamics for years to come.