Diageo completes East African Breweries sale to Asahi for US$2.3B

Diageo has agreed to sell its 65% stake in East African Breweries (EABL) to Japan’s Asahi Group Holdings for US$2.3 billion, marking the UK spirits giant’s final major African brewing divestment as it accelerates deleveraging efforts announced earlier this year. 

The transaction, announced on December 17, values EABL at US$4.8 billion and includes Diageo’s 53.68% shareholding in Kenyan spirits business UDVK. The deal represents a 17x adjusted EBITDA multiple and will reduce Diageo’s leverage by approximately 0.25x, the company says.

“This transaction delivers both significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet,” says Nik Jhangiani, interim CEO at Diageo, in a statement.

The sale continues Diageo’s strategic retreat from African beer markets. The company previously exited Ghana (announced January 2025, completed July 2025, selling its 80.4% Guinness Ghana Breweries stake to Castel Group for US$81 million), Nigeria (2024, divesting Guinness Nigeria to Tolaram Group), and Ethiopia and Cameroon in 2022.

Licensing deals preserve brand presence

Despite the ownership transfer, Diageo will maintain its East African market presence through long-term licensing agreements. EABL will continue producing Guinness, Smirnoff, Captain Morgan, Smirnoff Ice, and Orijin under license, while also distributing Diageo’s international premium spirits portfolio.

The licensing arrangement underscores Diageo’s strategy of divesting beer operations while retaining its flagship brands. In January, the company dismissed speculation about selling Guinness, stating it has “no intention to sell” the Irish stout, which analysts valued at up to US$10 billion.

Local brands, including Tusker, Kenya Cane, and Serengeti Lager, will remain EABL-owned assets. The company operates across Kenya, Uganda, and Tanzania and reported net sales of US$996 million in fiscal year 2025.

For Asahi, the acquisition represents its first major investment in African alcoholic beverages and entry into a growing regional market. “This business is a high-quality, leading company in Kenya, Uganda, and Tanzania, with an unrivalled brand portfolio and marketing capabilities,” says Atsushi Katsuki, president and CEO at Asahi.

Broader restructuring context

The EABL divestment forms part of Diageo’s broader Accelerate program, unveiled in May 2025, which targets US$500 million in cost savings over three years. That initiative came as Diageo braced for the impact of US tariffs, which the company estimated would cost approximately US$150 million annually.

In its fiscal 2025 Q3 trading statement, Diageo reported 2.9% net sales growth to US$4.4 billion, with strong Guinness performance in Europe offsetting continued spirits category softness. The company aims to return to its target leverage ratio range of 2.5-3.0x through selective non-core asset disposals.

African beer market dynamics

The EABL transaction comes as Africa’s beer market continues expanding. Asia, the Middle East, and Africa combined lead in beer market value, with Asia projected to drive global retail dollar sales at 9% CAGR through 2027, according to Innova Market Insights’ global beer trends data.

Beer purchasing penetration remains highest among alcoholic beverage categories, with over one-third of global consumers purchasing it in the past year. One-quarter of consumers say they are influenced most by traditionally made and traditionally crafted claims when buying beer, Innova consumer trends research shows.

The EABL deal is subject to regulatory approvals and expected to be completed in the second half of 2026. EABL will remain listed on the Kenya, Uganda, and Tanzania stock exchanges following completion.