Wedoany.com Report-Dec.18, Diageo has agreed to divest its full shareholding in Diageo Kenya Limited to Asahi Group Holdings. This transaction transfers Diageo's indirect 65 percent interest in East African Breweries plc and its direct 53.68 percent stake in UDVK, a spirits producer and importer based in Kenya.

East African Breweries, which holds the remaining interest in UDVK, will continue to exercise management control and fully consolidate the business in its financial statements. The company operates brewing and distribution facilities across Kenya, Uganda, and Tanzania, maintaining its position as the leading beer producer in the region. Its established infrastructure, experienced teams, and extensive supply and distribution networks support operations throughout East Africa.

Nik Jhangiani, Interim Chief Executive Officer 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. 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 strengthening our balance sheet. We remain committed to returning the Group to well within our target leverage ratio range of 2.5 – 3.0x through disposals of non-strategic, non-core assets, alongside delivering positive operating leverage and tighter capital discipline. This disposal, alongside the recent announcement by USL1 to conduct a strategic review of its ownership of RCB2, represents material steps in delivering on this commitment."

Asahi intends to preserve popular local brands while selectively introducing products from its international range, utilizing East African Breweries as a platform for regional expansion. The acquisition increases Asahi's presence in African beverage markets through an established operator with significant scale and market expertise.

Upon completion, Diageo will establish long-term licensing and transitional service agreements with East African Breweries. Locally originated brands will stay under East African Breweries' ownership. Updated arrangements will permit ongoing licensed production and distribution of certain Diageo spirits, ready-to-drink offerings, and Guinness, in addition to importing and distributing Diageo's premium international spirits portfolio.

The deal allows Diageo to streamline its holdings by exiting non-core assets while retaining brand availability in the region through licensing. For Asahi, it provides entry into a growing East African market via a well-positioned local partner.

East African Breweries continues as an independent entity with its regional focus intact, benefiting from continued access to select Diageo products under new terms. The transaction reflects strategic portfolio adjustments by both companies to align with long-term growth priorities and operational efficiency.