Diageo Plc, the British multinational alcoholic beverage corporation, has reached an agreement to sell its 65 percent controlling stake in East African Breweries Plc to the Japanese firm Asahi Group Holdings.

This landmark transaction represents the largest entry by a Japanese brewing company into the African alcoholic beverage sector.

The announcement, released on Wednesday, details that Diageo will divest its full 100 percent ownership of Diageo Kenya Limited, which possesses the 65 percent share in East African Breweries. Additionally, the deal includes Diageo’s 53.68 percent direct stake in UDV Kenya Limited, a prominent local spirits producer and importer.

East African Breweries currently owns the remaining 46.32 percent of UDV Kenya Limited. Under the existing structure, the regional brewing giant maintains management control and fully integrates the spirits business into its financial reporting.

Diageo stated that this disposal aligns with its broader corporate strategy of selling non-core assets. The primary goals of this move are to strengthen the company’s balance sheet and speed up the process of reducing its debt levels.

The expected net proceeds from the sale, after accounting for taxes and transaction costs, are estimated at $2.3 billion. This figure reflects an enterprise value of $4.8 billion for the entirety of East African Breweries and is expected to lower Diageo’s leverage by roughly 0.25x.

“The acquisition of EABL represents the first time a major Japanese brewing business has made an investment of this size in an African alcohol beverage business,” the company said. “Asahi is a strong, responsible, and experienced steward for the next phase of growth for EABL.”

This transaction signals a strategic pivot for Diageo, moving away from direct ownership of physical assets in East Africa. Pending the necessary regulatory approvals, the deal is projected to close during the second half of 2026, with East African Breweries remaining listed on stock exchanges in Kenya, Uganda, and Tanzania.

Nik Jhangiani, the interim CEO of Diageo, expressed pride in the achievements of the regional brewing group. He described the business as the premier beer platform in the region, built upon a sophisticated understanding of local consumers and their communities.

“This transaction delivers significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet,” Jhangiani said, adding that the disposal supports Diageo’s target leverage range of 2.5x to 3.0x.

East African Breweries stands as the largest beer producer in the region, with a history spanning over a century across Kenya, Uganda, and Tanzania. During its time under Diageo’s control, the company saw significant growth fueled by modern production plants and a seasoned management team.

Asahi, which is listed on the Japanese stock market, stated that it intends to protect the heritage of locally beloved brands. The global beverage group also plans to introduce selected international products from its own portfolio to consumers across the East African market.

The agreement includes provisions for Diageo to enter into long-term licensing and transitional service contracts with East African Breweries. This ensures that Guinness, specific spirits, and ready-to-drink brands will continue to be produced and distributed in the region.

Local brands such as Tusker and Kenya Cane will remain under the ownership of East African Breweries. Meanwhile, Diageo will continue to handle the import and distribution of its international premium spirits through these new arrangements.

Adriano Joshua, a financial economist based in Kenya, noted on LinkedIn that the main financial motivation for Diageo is deleveraging. He suggested that the company is transitioning toward a “capital-light” strategy within the East African region.

“By selling physical assets and distribution infrastructure while retaining long-term licensing agreements, Diageo will continue to earn high-margin royalty income from brands such as Guinness, Smirnoff and Captain Morgan without the operational risks or balance sheet burden of owning breweries,” Joshua said, adding that the transaction represents a major capital deployment into Africa for Asahi.

Market analysts have observed that the deal values East African Breweries at a notable premium compared to its usual trading levels on the Nairobi Securities Exchange.
Shortly after the announcement, the Nairobi Securities Exchange suspended trading of East African Breweries shares for the remainder of the day. This move followed a cautionary statement regarding the acquisition plans by Asahi.

“The halt follows the release of a cautionary announcement by the issuer during trading hours, coupled with the prior circulation of market-sensitive information. These measures have been taken to promote orderly trading and ensure equitable access to information for all market participants,” the Exchange said in a statement.

The Exchange confirmed that trading for the company’s shares would resume on the following business day.