Atsushi Katsuki, President and Group CEO, Director and Representative Executive Officer of Asahi Group Holdings and EABL Group CEO and Managing Director Jane Karuku and from (L)Taemin Park, Group Chief Growth and Alliance Officer
The Board of Directors of East African Breweries PLC (EABL) has today announced that Diageo PLC has agreed to sell its majority stake in EABL and its shareholding in the Kenyan spirits business, UDV (Kenya) Limited to Asahi Group Holdings (Asahi).
This acquisition would make Asahi the majority shareholder in East Africa’s largest beverage company, taking over the East African Breweries Limited (EABL) operations in Kenya, Uganda, and Tanzania. “We intend to retain the strong domestic brands owned by the company and introduce our preferred global brands into the market,” Asahi explained.
Diageo will be treated to net proceeds of approximately $2.3 billion (c. KSh 296.5 billion), excluding tax and costs associated with the transaction. EABL has been valued at an enterprise value of $4.8 billion (c. KSh 619 billion), which translates to 17 times its EBITDA.
EABL’s Board of Directors said that the acquisition is a “very strong vote of confidence in the long-term future of the business and in the East Africa region,” due to its “favorable demographics and economic growth patterns.” EABL stated that “the new ownership will leverage its legacy, state-of-the-art manufacturing facilities, experienced management, and strong route-to-market networks.”
The EABL Managing Director & CEO, Jane Karuku, observed that this deal will quicken their strategy.
“This acquisition represents a big step towards realizing our growth aspiration of becoming the most celebrated beverage company in Africa,” Karuku stated. “Our new majority shareholder has great expertise in innovation, developing world-class brands, and we will definitely benefit from their expertise in the next phase of our growth.”
Diageo’s Interim Chief Executive Officer, Nik Jhangiani, described the sale as creating value for shareholders while also allowing the group to refocus its strategy.
“We are highly proud of what EABL has delivered in Kenya, Uganda, and Tanzania,” Jhangiani stated. “This disposal will enhance the balance sheet of Diageo and help us stay on course to reduce the leverage back into our target range, despite continuing to working with Asahi on a licensing deal for brands in the region.”
As Asahi Group President and CEO Atsushi Katsuki has explained, EABL is a high-quality business with leading market positions, robust brands, marketing strengths, and manufacturing resources. “Working in partnership with EABL’s first-class management and staff, we will embrace growth and enhance corporate value, as well as contributing toward building local economies,” Katsuki said.
According to EABL, there will be no effect on its operations and employees due to the transaction. During the transition phase, Diageo will also continue to support Asahi so that the handover of ownership and operation is smooth