Diageo exits East African Breweries in $2.3 billion sale to Japan’s Asahi

Diageo, a global leader in premium spirits like Johnnie Walker whisky, Guinness beer, Smirnoff vodka, is selling its 65% stake in East African Breweries Limited (EABL) to Japan’s Asahi Group Holdings for  $2.3 billion, valuing the Kenyan-based brewer at roughly $4.8 billion.

The deal, expected to close in the second half of 2026, hands Asahi control of one of Africa’s most valuable drinks companies and marks Diageo’s latest retreat from beer production on the continent.

The transaction covers Diageo’s 65% shareholding in EABL, held through Diageo Kenya Limited, and includes its 53.7% stake in UDV Kenya, a spirits producer that is a subsidiary of EABL. The company will remain listed across Kenya, Uganda, and Tanzania, ensuring public shareholders stay in the mix even as ownership changes hands.

EABL reported $996 million in net sales and $94 million in profit for FY2025, with a valuation translating to 17 times adjusted EBITDA—a healthy multiple in a challenging consumer market. For Diageo, the sale will reduce its leverage by 0.25x, freeing up capital and aligning with its broader strategy to simplify operations and focus on high-margin spirits.

Asahi, which generates about $19 billion in annual revenue, called the acquisition a cornerstone for its long-term expansion into emerging markets. The Tokyo-listed beverage company already owns brands like Peroni Nastro Azzurro and Pilsner Urquell, but this marks its first major foray into Africa.

“We see Africa as a frontier for sustainable growth,” said an Asahi spokesperson. “EABL’s reach and reputation give us a platform to scale responsibly in the region.”

Under the deal, Diageo will retain its premium spirits and Guinness franchises through long-term licensing agreements. EABL will continue to brew and distribute Guinness locally, while also handling the import and sale of Diageo’s international spirits portfolio. Local icons such as Tusker and Kenya Cane will remain under EABL’s control.

From Africa to Asia

The exit fits into a larger restructuring at Diageo. Over the past two years, the company has sold or diluted stakes in Nigeria, Cameroon, and Ethiopia, preferring brand licensing to brewery ownership. The shift mirrors a broader global recalibration—Western multinationals are trimming capital-heavy beer businesses to concentrate on faster-growing, higher-margin segments such as whisky, vodka, and ready-to-drink cocktails.

In Africa, Diageo’s play is one of control without infrastructure. It retains its brands, distributors, and visibility but outsources the physical production and risk. The strategy suits a region where high import costs, volatile exchange rates, and patchy regulation make manufacturing a longer bet.

Asahi’s move runs counter to that trend. With Japan’s beer market stagnating, the group has been buying growth abroad—acquiring Peroni and Grolsch from AB InBev and Australia’s Carlton & United Breweries in recent years. Now it’s betting that East Africa’s fast-growing, young population offers the kind of upside missing at home.

Analysts see the logic: Diageo gains liquidity and balance-sheet relief, while Asahi inherits a profitable business with a century of brand equity and a strong logistics backbone. It also continues a gradual shift of consumer-sector ownership in Africa from European to Asian hands, a trend visible in telecoms, energy, and food manufacturing.

Looking ahead

The sale is expected to close by late 2026, pending regulatory approvals in Kenya, Uganda, and Tanzania. Once finalised, it will stand as Asahi’s largest investment in Africa to date, and one of the continent’s biggest beverage transactions in recent memory.

For Diageo, the decision extends a decade-long shift from breweries to brand management. Its legacy beers may change hands, but its logos will still pour from taps across East Africa—only now, under someone else’s roof.