Highlights

  • Diageo agrees to sell 65% of EABL and its Kenyan spirits business, UDVK, to Asahi.
  • Transaction expected to generate net proceeds of USD 2.3bn, de-leveraging Diageo by c.0.25x.
  • Long-term licensing agreements ensure continued production and distribution of Diageo brands.

Diageo (LSE:DGE) has entered into an agreement to sell its 65% shareholding in East African Breweries plc (EABL), along with its 53.68% stake in UDVK, to Asahi Group Holdings, Ltd, a Japanese global beverage company. The deal is estimated to generate net proceeds of USD 2.3bn after tax and transaction costs, reflecting a multiple of 17x adjusted EBITDA and an implied enterprise value of USD 4.8bn for 100% of EABL. The transaction is expected to reduce Diageo’s leverage by approximately 0.25x.

The disposal is part of Diageo’s strategy of selective divestment of non-core assets to strengthen the balance sheet and maintain its target leverage ratio of 2.5–3.0x. Completion of the transaction is subject to regulatory approvals and is expected in the second half of calendar year 2026.

Licensing and Transitional Agreements
Diageo will enter into long-term licensing and transitional service agreements with EABL. Locally owned brands, including Tusker and Kenya Cane, will remain under EABL’s ownership. Agreements will also cover production of Diageo spirits, such as Smirnoff and Captain Morgan, ready-to-drink beverages like Smirnoff Ice and Orijin, and the Guinness brand under license. The agreements will additionally cover the import and distribution of Diageo’s international spirits in the region.

Asahi’s Entry into East African Market
Asahi, a Japanese listed beverage company with operations in beer, alcohol, non-alcoholic beverages, and food, will acquire the stake in EABL, marking its first major investment in an African alcohol business. EABL operates in Kenya, Uganda, and Tanzania, managing both UDVK and its own beer portfolio. Asahi intends to continue operations under existing structures and preserve local brands while introducing products from its global portfolio.

Share Price Snapshot
DGE was trading 1.75% higher at GBX 1,712.00 per share as of 17 December 2025.