NAIROBI, Kenya — A seismic shift is rocking the African beverage landscape. British giant Diageo Plc, long seen as a cornerstone of the continent’s alcohol industry, is reportedly abandoning a significant part of its iconic East African Breweries Ltd. EABL stake, sending shockwaves across the market.
Diageo, which controls a powerful 65% majority in EABL, is now actively seeking to offload assets, a move that analysts say could fundamentally alter the region’s drinking habits. Sources close to the company indicate a colossal $2 billion sale of EABL’s core beer production operations is on the table. This stunning decision aims to free up crucial capital, but it leaves many questioning the future of the beloved Kenyan-based brewery.
To facilitate this dramatic exit, Diageo has enlisted the high-powered expertise of Bank of America Corp. and Goldman Sachs Group Inc. Their mission: find a buyer for these prime African assets. EABL, based in Nairobi, isn’t just any company; it’s a behemoth that brews beer, spirits, and soft drinks, serving 10 African nations including Kenya, Uganda, and Tanzania. Its current market value stands at $1.2 billion, a figure overshadowed by the proposed sell-off.
The reverberations of this news are already sparking a fierce bidding war. Major global players like Heineken NV, CastelGroup, and Anheuser-Busch InBev SA are reportedly circling, eager to snap up what Diageo is leaving behind. This signals a new era for African brewing, one where familiar brands could soon change hands.
This isn’t Diageo’s first retreat from the continent. In recent years, the company has been systematically shedding its African holdings, including stakes in Seychelles Breweries Ltd. and its Nigerian division. Most notably, Diageo struck a deal with Castel Group to offload 80.4% of its shares in Guinness Ghana Breweries Ltd., Guinness Cameroon S.A., and Meta Abo in Ethiopia. Now, with EABL on the chopping block, it appears Diageo’s strategic pivot away from direct African production is accelerating at an unprecedented pace.
Diageo Plc, headquartered in London, England, maintains a vast global footprint with offices in 80 countries and 132 enterprises worldwide. Yet, its latest move signals a significant reduction in its direct operational presence across Africa, leaving a void that other brewing titans are eager to fill.
