Kenya: Diageo to sell its stake in East African Breweries to Asahi Group

Diageo announced on December 17 it had agreed to sell its 65% stake in East African Breweries to Japan's Asahi Group Holdings in a $2.3 billion transaction, as the UK spirits group continues to streamline its portfolio after a challenging two-year period.

The deal also includes Diageo's majority holding in UDVK, a Kenya-based spirits producer and importer, following a strategic review of East African Breweries that had involved appointing banks.

Management appears to be accelerating a turnaround effort after demand pressure weakened its premiumisation strategy, which had been built around encouraging consumers to trade up to higher-priced spirits.

The transaction fits into a broader pattern of asset disposals across Africa in recent years, including exits from Seychelles Breweries and Nigeria, as well as the sale of an 80% stake in Guinness Ghana Breweries to Castel Group in January, alongside earlier divestments in Cameroon and Ethiopia.

Investors reacted cautiously positively, with Diageo shares rising as much as 2.6% in London, even though the stock remains down by roughly a third this year. East African Breweries shares were little changed in Nairobi after earlier gains of up to 9.9%.

The deal also comes ahead of a leadership transition, with former Tesco chief Dave Lewis set to take over as chief executive in January following Debra Crew's departure earlier this year.

For Asahi, the acquisition could mark a strategic expansion into Africa as growth opportunities at home become more limited. Over the past decade, the brewer has spent at least 2.3 trillion yen on overseas assets, including operations acquired from SABMiller and AB InBev, as well as businesses in Australia and the UK.

Asahi said the investment could provide a platform in East Africa, particularly Kenya, where longer-term growth is expected from economic and population expansion.

East African Breweries is expected to remain listed in Kenya, Uganda and Tanzania, with the transaction targeted to complete in the second half of 2026, subject to regulatory approvals.