Diageo (LSE:DGE, NYSE:DEO), the world’s largest spirits group, has agreed to sell its 65% stake in East African Breweries Ltd (NSE:EABL) to Asahi Group Holdings (TSE:2502) in a deal valued at $2.3bn, marking the UK spirits group’s full exit from direct beer ownership in Africa.
The transaction values EABL at about $4.8bn, making it Japan’s largest single investment in the African alcohol sector to date. Completion is expected in late 2026, subject to regulatory and shareholder approvals.
Under the agreement, Asahi will acquire Diageo’s controlling stake, consolidating its exposure to one of East Africa’s most profitable consumer-goods companies, with leading market positions in Kenya, Uganda and Tanzania. EABL’s portfolio includes flagship brands such as Tusker, Bell Lager and Serengeti.
The transaction will also require approvals from competition and capital-markets regulators in Kenya and other EABL markets, and is expected to trigger a mandatory offer to minority shareholders under Nairobi Securities Exchange rules.
For Diageo, which produces Johnnie Walker whisky and Captain Morgan rum, the sale would represent a strategic shift away from direct equity ownership in African beer producers, following years of portfolio rationalisation. The company has previously reduced or exited stakes in several African brewing assets, opting instead for licensing, distribution and spirits-led growth strategies.
Diageo faces multiple challenges including tariff increases in its key US market, elevated debt levels and signs of reduced alcohol consumption among younger consumers.
EABL has long been one of Diageo’s most valuable emerging-market assets, benefiting from strong cash generation, premiumisation trends and resilient demand across East Africa. The implied valuation reflects investor appetite for scale consumer platforms in high-growth African markets despite currency volatility and regulatory risk.
Asahi said the acquisition aligns with its strategy of expanding internationally through premium beer and beverage brands, diversifying earnings beyond Japan’s mature domestic market. Africa’s favourable demographics and rising middle class were cited as key attractions.
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