(Dec 17): Diageo plc agreed to sell its majority stake in East African Breweries Ltd to Japan’s Asahi Group Holdings Ltd in a US$2.3 billion deal as the struggling UK distiller seeks to spur growth by paring back non-core operations.
The deal includes Diageo’s 65% stake in East African Breweries as well as its majority holding in UDVK, a Kenya-based spirits producer and importer, the company said on Wednesday. East African Breweries already owns the rest of that company and has management control.
Diageo has been offloading assets in Africa in recent years, including selling its entire stake in Seychelles Breweries Ltd and exiting its Nigerian unit. In January, Diageo announced the sale of its 80% stake in Guinness Ghana Breweries Ltd to Castel Group. It has also sold Guinness Cameroon SA and Meta Abo Brewery in Ethiopia.
Diageo shares rose as much as 2.6% in London, but remain down by about a third this year. East African Breweries rose 1.5% in Nairobi.
Asahi has expanded overseas in recent years with deals for the likes of Australia’s Carlton & United and the UK’s Fuller, Smith & Turner.
Asahi expects East African Breweries to remain listed on the Kenya, Uganda and Tanzania stock exchanges after completion of the deal.
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