EABL Issues Warning After Announcing Sale To Japanese Company

East African Breweries PLC (EABL) has issued a cautionary notice to its shareholders, investors, and the public after receiving notification of an impending transaction involving its parent company, Diageo PLC.

In a statement released on Wednesday, December 17, EABL warned that the proposed transaction could have a material impact on the price of its securities and advised market participants to exercise caution as further details are awaited.

The EABL Board of Directors said it received formal communication from Diageo on Tuesday, December 16, outlining plans to sell its entire interest in Diageo Kenya Limited and UDV (Kenya) Limited to Japanese beverage holding company Asahi Group Holdings, subject to the fulfilment of regulatory conditions.

The Board noted that, based on Diageo’s current shareholding structure, the transaction will result in Diageo fully exiting its stake in EABL.

Atsushi Katsuki, President & Group CEO of Asahi Group Holdings, meeting EABL staff alongside EABL Group CEO & MD Jane Karuku shortly after the announcement that Asahi Group has acquired Diageo's 65% shareholding in EABL. /X.MWANGO CAPITAL

"On the afternoon of Tuesday, December 16, 2025 the board of directors (Board) of East African Breweries PLC (EABL) received notification from its parent company Diageo plc (Diageo) of the imminent agreement to sell, subject to the satisfaction of certain regulatory conditions, its entire interest in Diageo Kenya Limited and in UDV (Kenya) Limited (UDVK) to Asahi Group Holdings, Ltd. (Asahi) (the Transaction). Diageo owns 65% of the issued shares of EABL through its wholly-owned indirect subsidiary Diageo Kenya Limited, and 53.68% of the shares of UDVK through its wholly-owned subsidiary Diageo Great Britain Limited. As such, the Transaction will result in Diageo disposing of all of its stake in EABL," the statement read.

EABL further disclosed that 35 per cent of its issued shares are held by public shareholders and that Asahi intends to seek exemptions from regional capital markets authorities regarding the requirement to make a mandatory takeover offer for these shares.

"35% of the issued shares of EABL are held by public shareholders (the General Shares). Diageo has notified the Board that Asahi intends to submit an application to the capital markets authorities in Kenya, Uganda and Tanzania seeking an exemption from the requirement to make a mandatory takeover offer for the General Shares," the statement added.

The Board went on to reveal that Diageo and Asahi will issue separate announcements on the transaction, after which EABL will publish a further update in compliance with regulatory requirements.

EABL cautioned that the transaction could significantly affect the trading price of its securities on the Nairobi Securities Exchange, the Uganda Securities Exchange, and the Dar es Salaam Stock Exchange, urging restraint until more information is released.

"The Transaction may have a material effect on the price of EABL's securities. Accordingly, until further announcements are made, EABL shareholders, investors and the public are advised to exercise caution when dealing in EABL's securities on the Nairobi Securities Exchange, the Uganda Securities Exchange and the Dar es Salaam Stock Exchange," the statement concluded.

What This Means to Consumers

For consumers, the sale of EABL to Asahi Group is unlikely to trigger immediate, disruptive changes at the shelf or bar counter, but it does signal a shift in what the brand experience could look like over time.

In the short term, core EABL products such as Tusker, Bell, Senator, Uganda Waragi, and Serengeti are expected to remain available and unchanged. Asahi has indicated it will retain strong local brands, meaning pricing, taste profiles, and distribution networks are likely to stay stable as the new owner focuses on continuity rather than shock therapy.

Over the medium to long term, consumers could see a wider product variety. Asahi brings a global portfolio and deep expertise in brand innovation, which raises the odds of new beverages, reformulations, and premium offerings entering East African markets. This could mean more choice, especially in premium beers, non-alcoholic options, and ready-to-drink products.

Competition is also likely to intensify. A globally aggressive owner typically pushes efficiency, marketing, and product differentiation. That pressure can translate into better quality control and more consistent supply, but it may also lead to gradual price adjustments, particularly on premium lines.

Earlier on Wednesday, EABL announced that Asahi is set to assume majority ownership of the company, taking control of operations across Kenya, Uganda, and Tanzania.

Financially, the transaction implies an enterprise valuation of approximately $4.8 billion (Ksh619 billion) for 100 per cent of EABL’s business. Diageo is expected to receive estimated net proceeds of about $2.3 billion (Ksh296.5 billion) after tax and transaction costs, based on a multiple of 17 times adjusted EBITDA.

EABL said the deal reflects strong confidence in its long-term growth prospects and those of the wider East African region, citing favourable demographic trends and solid economic fundamentals.

Commenting on the transaction, EABL Managing Director and Chief Executive Officer Jane Karuku said the acquisition aligns with the company’s long-term growth ambitions.

"This acquisition marks a significant step in accelerating our growth ambition of becoming the most celebrated beverage business in Africa. The new majority owner brings significant knowledge and expertise in innovation and growing successful brands globally that will help us achieve that ambition," she remarked.

Asahi also expressed confidence in EABL’s market position and future outlook, with Group President and Chief Executive Officer Atsushi Katsuki highlighting the strategic importance of the acquisition.

"This business is a high-quality, leading company in Kenya, Uganda, and Tanzania, with an unrivalled brand portfolio and marketing capabilities, state-of-the-art production facilities and strong market shares. Together with its excellent management team and employees, we will pursue sustainable growth and medium- to long-term enhancement of corporate value, while contributing to the development of the local economies," he stated.

A worker handling bottled beer at one of EABL's factories. /BUSINESS TODAY