Diageo has moved to strengthen its African operations, proposing an increase in its holding in East African Breweries.
The Johnnie Walker brand owner confirmed today that the Diageo Kenya division has applied for regulatory approval to up its control of publicly-listed EAB from the current 50.03% level to 65%. If granted, a partial tender offer will be tabled to the Kenya-based brand owner’s shareholders, with the transaction, based on yesterday’s closing price of KES138, expected to cost Diageo around KES16.34bn (US$134m).
Diageo has confirmed it does not intend to pursue full ownership.
EAB’s footprint in Africa is concentrated in its home market along with Tanzania and Uganda, although its products “are sold in more than ten countries across Africa and beyond”, Diageo said. Best known for the Tusker lager brand, the company also handles the likes of Captain Morgan, Johnnie Walker and Smirnoff for Diageo.
Dayalan Nayager, who was appointed president of Africa for Diageo earlier this year, sits on the board of EAB, which is celebrating its 100th anniversary this year. The continent accounted for 11% of group sales in the 12 months to the end of June.
In July, the group rationalised its production presence in Africa, offloading the Guinness Cameroon brewery to Castel Group.
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