The landscape of East African alcohol is about to undergo its most significant architectural change in decades. Diageo, the London-based owner of Guinness and Johnnie Walker, has agreed to sell its majority stake in East African Breweries PLC (EABL) to the Japanese beverage giant Asahi Group Holdings.
The deal is valued at $2.3 billion in net proceeds. This isn’t just a share swap; it is a full strategic pivot that sees a Japanese brewing major make its first investment of this magnitude on the African continent.
For decades, EABL has been the crown jewel of Diageo’s African operations. But under the terms of this new transaction, Asahi will take the wheel, assuming control of operations across Kenya, Uganda, and Tanzania. This includes the acquisition of UDV (Kenya) Limited, the arm responsible for the local spirits business.
The Numbers: A Premium Valuation
The finances behind this deal suggest Asahi is paying a premium to unlock the African market. The transaction equates to a multiple of 17x adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation).
To put that in perspective, implied enterprise value for 100% of EABL is pegged at $4.8 billion (approx. KES 619 billion). This is a massive vote of confidence—or perhaps a calculated gamble—on the “robust demographic” prospects of East Africa. Asahi is essentially betting that the region’s drinking population will grow fast enough to justify the price tag.
Why is Diageo Selling?
If EABL is such a strong asset, why is Diageo walking away? The answer lies in balance sheets and corporate restructuring.
Nik Jhangiani, Diageo’s Interim CEO, framed the sale as a move to “strengthen our balance sheet.” In plain English: Diageo is looking to pay down debt. The company is targeting a leverage ratio of 2.5 – 3.0x, and selling EABL allows them to offload what they classify as a “non-strategic” asset to get back within that safety zone. This follows a similar recent move where Diageo’s subsidiary USL announced a review of its ownership of the Royal Challengers Bangalore (RCB) cricket franchise.
However, Diageo isn’t disappearing entirely. The deal involves a licensing agreement. While Asahi will own the factories and the distribution networks, EABL will continue to brew and sell Diageo’s portfolio—brands like Guinness, Captain Morgan, and Johnnie Walker—under license.
Enter Asahi: The Super Dry Era
For Asahi, this is about expansion. The Japanese domestic market is shrinking due to an ageing population, forcing companies like Asahi to look outward for growth.
“We will pursue sustainable growth… while contributing to the development of the local economies,” said Atsushi Katsuki, CEO of Asahi Group.
Asahi is inheriting a beast of a machine. EABL comes with state-of-the-art production facilities and a domination of the regional market that is rare in the global beer industry. Asahi intends to preserve the local heavy hitters—Tusker, Bell Lager, Serengeti Lager—while likely introducing its own premium lineup, including Asahi Super Dry, Peroni Nastro Azzurro, and Pilsner Urquell, to East African shelves.
What Happens Next?
For the average drinker in Nairobi or Kampala, nothing changes immediately. The deal is subject to regulatory approvals and is expected to close in the calendar year 2026.
Both companies have stated there will be no job losses and no operational changes for EABL’s subsidiaries. The current management, including MD & CEO Jane Karuku, will remain to steer the ship under its new Japanese ownership.
“The new majority owner brings significant knowledge and expertise in innovation,” Karuku noted, signaling that while the legacy brands remain, the technology and brewing techniques might see a Japanese influence in the coming years.
Diageo gets its cash; Asahi gets its growth market. The only question remaining is how the Japanese philosophy of Kaizen (continuous improvement) will blend with the rich, century-old heritage of East African brewing.
