Diageo Sells Majority Stake in East African Breweries to Asahi for $2.3 Billion

— Diageo, the world’s largest spirits producer, has agreed to sell its 65% stake in East African Breweries Limited (EABL) to Japan’s Asahi Holdings for $2.3 billion, marking its exit from direct ownership of African beer assets.

The transaction values EABL, a Nairobi Securities Exchange blue-chip stock and one of East Africa’s most valuable companies by market capitalisation, at approximately $4.8 billion. The companies said the deal is expected to close in the second half of 2026, subject to regulatory approvals.

The sale represents the largest investment by a Japanese brewer in an African alcohol business to date. EABL operates across Kenya, Tanzania, and Uganda and is best known for its flagship Tusker beer brand, which traces its origins to 1923.

Under the agreement, EABL will retain ownership of Tusker and its other local brands, while entering into new production and distribution arrangements with Diageo for Guinness and selected spirits. Some Diageo products will continue to be imported and distributed by EABL.

London-listed Diageo, maker of Johnnie Walker whisky and Captain Morgan rum, has been under pressure from rising debt levels, shifting consumer preferences—particularly among younger drinkers—and potential tariff increases in its key U.S. market, including proposed measures affecting tequila imports from Mexico.

The company has committed to divesting non-core assets as part of a broader strategy to strengthen its balance sheet and reduce costs. Diageo said the EABL sale aligns with this objective.

“This transaction delivers significant value for Diageo shareholders and accelerates our commitment to strengthening the balance sheet,” said interim Chief Executive Officer Nick Jhangiani.

Following the announcement, Diageo shares rose nearly 2%, while EABL shares gained close to 4%.

Jhangiani is expected to revert to his role as chief financial officer in January, when former Tesco CEO Dave Lewis assumes leadership of Diageo, tasked with revitalising growth at the spirits giant.

For Asahi, the acquisition supports its strategy of expanding beyond mature markets in Europe and Japan into higher-growth regions, including Africa and South America. Asahi President and CEO Atsushi Katsuki said EABL brings a strong portfolio of brands, established marketing capabilities, and robust production infrastructure.