Diageo has lined up another consolidatory divestment in Africa, this time in Kenya, resulting in its majority holding in the East African Breweries unit moving across to Asahi Group.
The Guinness & Smirnoff owner announced today (17 December) that it has agreed to sell Diageo Kenya to Asahi. The Kenyan unit owns 65% of East African Breweries (EABL) and 54% of domestic spirits producer and importer UDVK. EABL owns the other 46% of UDVK, which produces brands including Kenya Cane rum and Chrome vodka.
Also included in the deal are “long-term licensing agreements” for EABL to “produce certain Diageo spirits”, including Captain Morgan and Smirnoff, as well as the brewing of Guinness for markets including Kenya, Tanzania and Uganda. Importation and distribution of Diageo’s other international spirits in the East Africa region will also be handled by EABL
“Our medium- to long-term management policy, which has been developed by backcasting from megatrends, sets forth a vision for our business portfolio that emphasises growth of our existing business centred on core beer brands and expansion into new business areas,” Asahi said today. “We are pursuing initiatives in existing markets, such as driving premiumisation and growing global brands, as well as expansion of our geographic footprint.
“This transaction is part of this strategy. Our objective is to establish a foundation for medium- to long-term growth by acquiring a leading platform in Kenya and the East African market, which is expected to deliver long-term growth driven by population increase and economic expansion.”
Diageo has been busy consolidating its fragmented footprint in Africa’s beer markets of late: At the start of this year, the group offloaded its majority stake in Guinness Ghana Breweries to Castel Group for a fee of US$81m, while other transactions impacted holdings in Guinness Nigeria and Guinness Cameroon in 2024 and 2022 respectively, with the Guinness Cameroon interest also having been acquired by Castel.
Seven months earlier, in January 2022, Diageo also sold Meta Abo Brewery in Ethiopia to Castel.
