Japan’s Asahi Group Holdings agreed to acquire Diageo Plc’s majority stake in East African Breweries for $3 billion, marking the first large-scale investment by a major Japanese brewer in the African alcohol market.
The deal, announced Wednesday, gives Asahi a 65% controlling interest in the Nairobi-based company, which produces Tusker, Senator, and Serengeti beers across Kenya, Uganda, and Tanzania. Asahi will pay $2.35 billion (¥365 billion) for Diageo Kenya Limited and $646 million (¥100 billion) for a majority stake in spirits producer UDVK.
Investors reacted coolly. Asahi shares fell as much as 7.5% in Tokyo trading Thursday, their steepest decline in more than a year. Citi Research analyst Hiroki Watanabe called the acquisition overpriced, noting the implied 17x EBITDA multiple exceeds industry norms.
The purchase will likely push Asahi’s leverage to 3.8x net debt-to-EBITDA, above its stated target of 2.5-3x. The company acknowledged it may temporarily breach that guideline.
For Diageo, the exit continues a retreat from African brewing operations following recent sales of stakes in Ghana, Nigeria, and Cameroon. The British drinks giant will retain a presence through long-term brand licensing agreements for Guinness, Johnnie Walker, and Smirnoff.
EABL posted net sales of $996 million and EBITDA of $258 million in its latest fiscal year. Asahi’s management cited population growth and economic expansion as drivers for the region’s long-term potential. The transaction requires regulatory approval in all three East African countries and is expected to close in the second half of 2026.
