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Diageo has agreed to sell its 65% shareholding in East African Breweries (EABL) to Asahi Group for $2.3 billion.

The agreement will see Diageo sell its 100% shareholding in Diageo Kenya Limited, which holds 65% of the EABL shares, to Japanese brewing giant Asahi. It marks the largest investment a major Japanese brewing group has made in an African alcoholic beverage business to date.

Diageo was first reported to be considering a review of the EABL business this summer, as part of previously announced and ongoing measures to improve its operating leverage and reinvest in future growth.

EABL is East Africa’s largest beer business, established over a century ago and with a growing presence across Kenya, Uganda and Tanzania. In the fiscal year ended 30 June 2025, EABL reported net sales of $996 million, $258 million EBITDA and net income of $94 million, with net debt at $229 million.

Asahi, which offers a variety of beer, alcohol and non-alcohol beverages within its range, said it intends to preserve EABL’s renowned local brands while introducing globally recognised names from its portfolio to consumers in East Africa.

Diageo has committed to entering into long-term licensing agreements alongside transitional service agreements with EABL. Locally owned brands, such as Tusker and Kenya Cane, will remain owned by EABL.

The deal will also see renewed agreements for EABL to produce certain Diageo spirits, like Smirnoff and Captain Morgan, as well as RTD brands like Smirnoff Ice and Orijin, and the Guinness brand under licence. Additionally, agreements will cover the import and distribution of Diageo international premium spirits.

Diageo’s 53.68% directly owned shareholding in UDVK, a Kenya-based spirits producer and importer, is also included in the transaction. EABL, which owns the other 46.32%, has management control and fully consolidates UDVK.

Nik Jhangiani, interim CEO of Diageo, said: “We are incredibly proud of the achievements of EABL and our colleagues across Kenya, Uganda and Tanzania. EABL and Diageo have built the largest beer business in East Africa, a testament to driven people with a passion for the consumers and communities they serve.”

He continued: “We are excited to partner with Asahi through the licensing of Diageo brands in the region going forward. This transaction delivers both significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet.”

Jhangiani added that the disposal of EABL represents a “material step” in delivering on the company’s commitment to returning the group to within its target leverage ratio range through disposals of non-strategic, non-core assets, alongside tighter capital discipline.

Atsushi Katsuki, president and group CEO of Asahi, commented: “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.”

Asahi expects EABL to remain listed on the Kenya, Uganda and Tanzania stock exchanges post completion, which is expected in the second half of 2026, subject to regulatory approval.