Capital markets regulators in Kenya, Uganda and Tanzania have approved Asahi Group Holdings’ acquisition of shares in East African Breweries PLC from Diageo plc without requiring a mandatory takeover offer.
The Capital Markets Authority in Kenya, the Capital Markets and Securities Authority in Tanzania, and the Capital Markets Authority in Uganda granted the approvals.
The announcement was made by Asahi’s legal and financial advisers, including A & O Shearman, ENS, Nomura and Absa.
EABL to Remain Listed Despite Ownership Change
In a statement, Asahi confirmed that each regulator had granted exemptions from the requirement to make a mandatory takeover offer under the respective takeover regulations in Kenya, Tanzania and Uganda.
“Asahi hereby announces that each of the CMA, the CMSA and the CMA-U has granted an exemption from the requirement to make a mandatory take-over offer for EABL in Kenya, Tanzania and Uganda (as applicable) under the Kenya Take-over Regulations, the Tanzania Take-over Regulations, and the Uganda Take-over Regulations, respectively,” the company said.
The approval allows Asahi to proceed with the acquisition without buying out minority shareholders, meaning EABL will remain listed on regional stock exchanges.
The exemptions also indicate regulators’ confidence that the transaction will not disadvantage minority investors.
Cross-Border Approvals Required
Because EABL is listed on the Nairobi Securities Exchange and cross-listed on the Dar es Salaam Stock Exchange and the Uganda Securities Exchange, Asahi was required to secure approvals from regulators across all three markets before proceeding with the transaction.
Competition Regulators Now Take Centre Stage
With the takeover exemptions secured, the transaction now awaits scrutiny from East Africa’s competition authorities. The next phase of approval will involve the Competition Authority of Kenya, the Fair Competition Commission and Uganda’s Ministry of Trade, Industry and Cooperatives.
The authorities are expected to assess whether the deal could raise concerns relating to market dominance, competition and consumer welfare within the East African alcoholic beverages sector.
USD 2.3 Billion Deal Expands Asahi’s African Footprint
The proposed transaction involves the acquisition of the entire 65 per cent shareholding held by Diageo in EABL, alongside its 53.7 per cent stake in UDV Kenya Limited.
Valued at approximately USD 2.3 billion, equivalent to about KES 297 billion, the deal represents one of the largest transactions in East Africa’s beverage sector.
The acquisition marks a major expansion by Asahi into Africa’s fast-growing alcoholic beverages market through EABL, one of the region’s largest brewers with operations and distribution networks across Kenya, Uganda and Tanzania.
Asahi Commits to Retaining EABL Identity
When the transaction was first announced, Asahi stated that it intended to retain EABL as a listed company while preserving its existing identity and operations.
EABL is also expected to continue manufacturing, selling and distributing its own brands as well as brands produced by or licensed from Diageo plc.