East African Breweries Plc (EABL) has issued a cautionary announcement to investors following notification from its parent company, Diageo plc, of an imminent agreement to sell its entire shareholding in the brewer to Japan’s Asahi Group Holdings Ltd, subject to regulatory approvals.
In a notice released on Wednesday, EABL said its board of directors was informed on the afternoon of Tuesday, December 16, 2025, that Diageo plans to dispose of its interests in Diageo Kenya Limited and UDV (Kenya) Limited to Asahi, a move that would effectively end Diageo’s controlling ownership of EABL.
“The board of directors of East African Breweries Plc received notification from its parent company Diageo plc of the imminent agreement to sell, subject to the satisfaction of certain regulatory conditions, its entire interest in Diageo Kenya Limited and in UDV (Kenya) Limited to Asahi Group Holdings Ltd,” the company said in the cautionary announcement.
Transaction Structure and Ownership Impact
Diageo currently holds 65 percent of the issued shares of EABL through its wholly owned indirect subsidiary, Diageo Kenya Limited. In addition, Diageo owns 53.68 percent of UDV (Kenya) Limited through its wholly owned subsidiary, Diageo Great Britain Limited.
As a result, the proposed transaction would see Diageo fully exit its shareholding in EABL, transferring control of the region’s largest brewer to Asahi, a global beverage group headquartered in Japan.
EABL is listed on the Nairobi Securities Exchange, the Uganda Securities Exchange, and the Dar es Salaam Stock Exchange. Approximately 35 percent of the company’s issued shares are held by public shareholders across the three markets.
The company said Diageo has notified the board that Asahi intends to apply to capital markets regulators in Kenya, Uganda, and Tanzania for an exemption from the requirement to make a mandatory takeover offer for the shares held by public investors.
Under regional capital markets regulations, an entity acquiring effective control of a listed company is ordinarily required to make a mandatory offer to minority shareholders, unless an exemption is granted by regulators.
Regulatory Process and Market Implications
The transaction is subject to regulatory approvals, including from capital markets authorities in the three East African jurisdictions where EABL’s shares are listed.
EABL noted that Diageo and Asahi will each issue separate announcements regarding the transaction, after which the EABL board will make a further announcement in compliance with the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023.
“The transaction may have a material effect on the price of EABL’s securities,” the company said, adding that shareholders, investors, and members of the public should exercise caution when dealing in EABL shares until further announcements are made.
The cautionary notice was issued pursuant to Regulation 89(2) of the Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023, which requires listed companies to alert the market where price-sensitive information may affect securities trading.
Strategic Shift for Diageo
Diageo’s planned exit from EABL would mark a significant strategic shift for the UK-based spirits and beverages multinational, which has maintained a controlling stake in the East African brewer for decades.
EABL is one of Diageo’s most prominent operations in Africa, with a dominant market position in Kenya and significant footprints in Uganda and Tanzania. Its portfolio includes flagship beer, spirits, and ready-to-drink brands that have anchored Diageo’s presence in the region.
Market analysts say the move could reflect a broader portfolio realignment by Diageo as global beverage companies reassess capital allocation, regional exposure, and growth strategies amid shifting consumer trends and currency volatility in emerging markets.
Neither Diageo nor Asahi has disclosed financial details of the proposed transaction at this stage.
Asahi’s Expansion Ambitions
For Asahi Group Holdings, the acquisition would represent a major expansion into the East African alcoholic beverages market, giving the Japanese brewer immediate access to established brands, manufacturing capacity, and distribution networks across the region.
Asahi has in recent years pursued international expansion through acquisitions, particularly in Europe and Asia-Pacific, as it seeks to diversify earnings beyond its home market.
If completed, the EABL transaction would mark one of Asahi’s most significant entries into the African consumer market, positioning it as a major player in a region with a young population, rising urbanisation, and long-term consumption growth potential.
Impact on Minority Shareholders
The intention by Asahi to seek an exemption from making a mandatory takeover offer to public shareholders is likely to attract close scrutiny from regulators and minority investors.
Public shareholders hold approximately 35 percent of EABL’s issued shares, and any exemption from a takeover offer would limit their ability to exit at a potential control premium following the change in ownership.
Regulators in Kenya, Uganda, and Tanzania will assess whether granting such an exemption aligns with investor protection principles under applicable securities laws.
Until clarity emerges on the regulatory outcome, analysts expect heightened trading activity and volatility in EABL shares across the three exchanges.
Board and Investor Advisory
EABL said its board is monitoring developments closely and will continue to update the market in line with regulatory requirements.
The cautionary announcement was issued with the approval of the Capital Markets Authority, although the regulator noted that, as a matter of policy, it assumes no responsibility for the accuracy of the statements contained in the announcement.
The notice was signed by EABL Company Secretary Angela Namwakira on behalf of the board of directors.
Market Significance
EABL is one of East Africa’s largest consumer goods companies by market capitalisation and a bellwether stock on the Nairobi Securities Exchange. Any change in its ownership structure has implications not only for investors but also for suppliers, distributors, employees, and government revenues across the region.
Should the transaction proceed, it would rank among the most consequential cross-border corporate deals in East Africa’s consumer sector in recent years.
For now, investors are awaiting further disclosures from Diageo, Asahi, and EABL as regulatory processes unfold.
