Diageo reviewing East African Breweries business – Bloomberg

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Diageo is reportedly conducting a strategic review of its East African Breweries Ltd (EABL) subsidiary, which could include a potential sale of the beer business, according to Bloomberg.

EABL was established in 1922 with the creation of Kenya Breweries. The business focuses on its core markets of Kenya, Uganda and Tanzania, with products across a wide brand portfolio – including Tusker, Bell and Serengeti – sold across Africa.

In Bloomberg’s report, it states that its unidentified sources who are ‘familiar with the matter’ revealed that the alcohol giant is working with Bank of America and Goldman Sachs to conduct the review, in line with an asset-light model to free up capital for boosting growth.

As part of this, a sale of just the beer business could be valued at around $2 billion in a deal, according to Bloomberg’s sources – with brewing giants like Heineken, Castel Group and Anheuser-Busch InBev listed as potential interested parties.

In May, Diageo announced a $500 million cost savings programme over three years to enable reinvestment in future growth and ‘improved operating leverage’. More details of measures to be taken as part of the programme, dubbed ‘Accelerate,’ are expected to be revealed in August.

Further asset disposals could be a part of this, with the company having already offloaded several units recently, including within its Africa business. Earlier this month, the company finalised the sale of its 80.4% shareholding in Guinness Ghana Breweries to Castel.

The review is said to be in its final stages, with no final decisions made as of yet. Diageo declined to comment when approached by FoodBev.

The company has recently replaced its former CEO, Debra Crew, who faced a challenging period of sales declines and economic uncertainty during her tenure. She took on the chief executive position in 2023. The board is currently searching for a permanent replacement, with CFO Nik Jhangiani assuming the position on an interim basis until an appointment is made.