Diageo Agrees to Sell EABL Shareholding to Asahi

Rhea-AI Summary

Diageo (NYSE:DEO) has agreed to sell its 65% holding in East African Breweries plc (EABL) and its 53.68% direct stake in UDVK to Asahi for estimated net proceeds after tax and transaction costs of $2.3bn. The deal implies an enterprise value for 100% of EABL of $4.8bn (c.17x adjusted EBITDA) and will de-lever Diageo by c.0.25x. Completion is subject to regulatory approvals and is expected in H2 2026. Diageo will enter long-term licensing and transitional service agreements to secure continued production and distribution of Guinness, selected spirits and ready-to-drink brands in East Africa. Fiscal year ended 30 June 2025 EABL metrics: $996m net sales, $258m EBITDA, $94m net income, and $229m net debt.

Positive

• $2.3bn estimated net proceeds after tax and transaction costs
• Transaction implies $4.8bn enterprise value for 100% of EABL (c.17x adj EBITDA)
• Sale reduces leverage by c.0.25x toward target range

Negative

• Diageo exits its 65% stake in EABL, reducing direct exposure to East Africa
• Completion subject to regulatory approvals, expected in H2 2026, creating timing and execution risk

Key Figures

Estimated net proceeds $2.3bn After tax and transaction costs from EABL/UDVK disposal

Valuation multiple 17x adjusted EBITDA Implied by EABL transaction proceeds

Implied EABL enterprise value $4.8bn Implied enterprise value for 100% of EABL

Deleveraging impact 0.25x Approximate reduction in Diageo’s leverage from transaction

EABL net sales $996m Fiscal year ended 30 June 2025

EABL EBITDA $258m Fiscal year ended 30 June 2025

EABL net income $94m Fiscal year ended 30 June 2025

EABL net debt $229m As of 30 June 2025

Market Reality Check

$89.39 Last Close

Volume Volume 1,480,956 is slightly below the 20-day average of 1,587,855 (relative volume 0.93x) ahead of this announcement. normal

Technical Shares at $89.39 are trading below the 200-day MA of $103.17, and about 32.45% under the 52-week high of $132.34.

Peers on Argus

Key beverage peers showed small mixed moves (e.g., MNST +0.47%, CCEP +0.37%, ABEV -0.39%, FMX -0.30%, BUD +0.20%) with no momentum-cluster flagged, suggesting this EABL sale is stock-specific rather than a broad sector catalyst.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 09	Brand festival promo	Positive	-2.9%	Mr Black Espresso Martini Fest marketing across multiple geographies.
Dec 04	Holiday campaign launch	Positive	-2.8%	Smirnoff ICE holiday campaign with pop icon partnership and promotions.
Dec 02	Marketing partnership	Positive	-0.6%	Ketel One holiday campaign tied to film moments and Sundance link.
Nov 20	Sports marketing campaign	Positive	+0.1%	Smirnoff NFL ‘We Do Game Days’ campaign and related promotions.
Nov 18	Limited collaboration	Positive	-1.9%	Guinness holiday collaboration with Last Crumb and related activations.

Pattern Detected

Recent brand and marketing announcements have mostly been followed by modest negative price reactions, suggesting limited short-term upside historically from such news.

Recent Company History

Over the last few months, Diageo’s news flow has centered on brand partnerships and marketing campaigns across Smirnoff, Ketel One, Guinness and Mr Black. These events, while supportive of brand equity, were followed mainly by small negative price moves (e.g., -2.89%, -2.79%, -1.91%). In contrast, today’s divestment of a 65% EABL stake for net proceeds of $2.3bn and implied $4.8bn enterprise value is a balance-sheet-focused transaction rather than a pure marketing update.

Market Pulse Summary

This announcement details Diageo’s agreement to sell its 65% stake in EABL and related Kenyan spirits interests to Asahi, generating estimated net proceeds of $2.3bn and implying a $4.8bn enterprise value. Management highlights an expected leverage reduction of about 0.25x while retaining regional presence through long-term licensing of Guinness and key spirits brands. EABL’s fiscal 2025 metrics—net sales of $996m, EBITDA of $258m, net income of $94m—frame the scale of assets being exited versus Diageo’s ongoing strategic focus and capital discipline.

Key Terms

market abuse regulation regulatory

"inside information for the purposes of Article 7 of the Market Abuse Regulation"

Market abuse regulation consists of laws and rules designed to prevent dishonest or manipulative practices in financial markets. It aims to ensure fair and transparent trading, so investors can trust that markets operate honestly, much like rules that keep a game fair. By reducing unfair advantages, it helps protect investor confidence and promotes healthy, efficient markets.

inside information regulatory

"THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7"

Information not available to the public that, if known, would likely cause a company’s stock or bonds to rise or fall—for example, undisclosed earnings, deals, product results, or management plans. It matters because trading on that information gives an unfair advantage, can distort market prices, and is typically illegal or subject to strict rules, so investors watch for proper disclosure and compliance to protect fair, transparent markets.

enterprise value financial

"resulting in an implied enterprise value for 100% of EABL of $4.8bn"

Enterprise value is the total worth of a company, reflecting what it would cost to buy the entire business. It includes the company's market value plus any debts, minus its cash holdings, offering a comprehensive picture of its true value. Investors use it to compare companies regardless of their capital structures, helping them assess how much they would need to pay to acquire the business.

ebitda financial

"equating to a multiple of 17x adjusted EBITDA, resulting in an implied"

EBITDA stands for earnings before interest, taxes, depreciation, and amortization. It measures a company's profitability by focusing on the money it makes from its core operations, ignoring expenses like taxes and accounting adjustments. Investors use EBITDA to compare how well different companies are performing financially, as it provides a clearer picture of operational success without the influence of financial structure or accounting choices.

net debt financial

"with net debt at $229m.ListingsAsahi expects EABL to remain"

Net debt is the total amount a company owes after subtracting the cash and assets it has that can be used to pay off that debt. It shows how much debt is truly a burden, helping investors understand if a company is financially healthy or heavily borrowed. Think of it like calculating how much money you owe after using your savings to pay part of it.

AI-generated analysis. Not financial advice.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR

LONDON, UK / ACCESS Newswire / December 17, 2025 / Diageo enters into agreement to sell its shareholding inEast African Breweries plc ("EABL") to Asahi Group Holdings, Ltd ("Asahi")

• Announcement today of agreement by Diageo to sell to Asahi its 65% shareholding in EABL, and its shareholding in the Kenyan spirits business, UDVK.

• Disposals consistent with Diageo's strategy of appropriate and selective disposals of non-core assets, strengthening the balance sheet and supporting our previously shared commitment to de-lever.

• Estimated net proceeds after tax and transaction costs of $2.3bn, equating to a multiple of 17x adjusted EBITDA, resulting in an implied enterprise value for 100% of EABL of $4.8bn.

• Transaction will de-lever Diageo's balance sheet by c.0.25x.

• Diageo has committed to enter into long-term licensing agreements with EABL to secure the continued production and distribution of Guinness, local spirits and ready-to-drink brands, as well as the distribution of Diageo international spirits.

• 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. Asahi is a strong, responsible and experienced steward for the next phase of growth for EABL.

• Subject to regulatory approvals, completion is expected in the second half of calendar year 2026.

Today, Diageo announces that it has entered into an agreement to sell its 100% shareholding in Diageo Kenya Limited, which holds 65.00% of the shares in EABL to Asahi, including its shareholding in the Kenyan spirits business, UDVK. Asahi is a Japanese listed global beverage leader offering a diverse portfolio of brands centred on beer, alcohol and non-alcoholic beverages, as well as food. Included in this transaction is Diageo's 53.68% directly owned shareholding in UDVK, a Kenya based spirits producer and importer. EABL, which owns the other 46.32%, has management control and fully consolidates UDVK.

EABL is the largest beer business in East Africa with a heritage that dates back over a century and has delivered a strong growth track record in Kenya, Uganda and Tanzania. Asahi intends to preserve beloved local brands while introducing globally recognised names from its portfolio to consumers in East Africa. EABL benefits from state-of-the-art production facilities, a seasoned Board and management team with extensive experience, and strong relationships with employees, local partners and customers.

Diageo has committed to enter into long term licensing agreements as well as transitional service agreements with EABL. Locally owned brands will remain owned by EABL (e.g. Tusker, Kenya Cane). There will be refreshed agreements for EABL to produce certain Diageo spirits (e.g. Smirnoff, Captain Morgan) and ready-to-drink brands (e.g. Smirnoff Ice, Orijin), as well as the iconic Guinness brand under licence and the import and distribution of Diageo international premium spirits.

Nik Jhangiani Interim Chief Executive Officer of Diageo said: "We are incredibly proud of the achievements of EABL and our colleagues across Kenya, Uganda and Tanzania. EABL and Diageo have built the largest beer business in East Africa, a testament to driven people with a passion for the consumers and communities they serve. We are excited to partner with Asahi through the licensing of Diageo brands in the region going forward.

This transaction delivers both significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet. We remain committed to returning the Group to well within our target leverage ratio range of 2.5 - 3.0x through disposals of non-strategic, non-core assets, alongside delivering positive operating leverage, and tighter capital discipline. This disposal, alongside the recent announcement by USL¹ to conduct a strategic review of its ownership of RCB²,represent material steps in delivering on this commitment."

¹USL - United Spirits Limited, India. ² RCB - Royal Challengers Bengaluru cricket team

Atsushi Katsuki, President and Group Chief Executive Officer, Director and Representative Executive Officer of Asahi added:

"This business is a high-quality, leading company in Kenya, Uganda, and Tanzania, with an unrivalled brand portfolio and marketing capabilities, state-of-the-art production facilities and strong market shares. Together with its excellent management team and employees, we will pursue sustainable growth and medium- to long-term enhancement of corporate value, while contributing to the development of the local economies."

Financials ³

In the fiscal year ended 30 June 2025, EABL reported net sales of $996m, $258m EBITDA and net income of $94m, with net debt at $229m.

Listings

Asahi expects EABL to remain listed on the Kenya, Uganda and Tanzania stock exchanges post completion.

³Foreign exchange rates for KES:USD used to translate net sales, EBITDA, net income at fiscal 25 cumulative weighted average rate 129.28. Net debt at spot rate 30 June 2025 129.23

For further information, please contact:

Investor relations:

Sonya Ghobrial +44 (0) 7392 784 784
Andy Ryan +44 (0) 7803 854 842
Grace Murphy +44 (0) 7514 726 167

Media relations:

Rebecca Perry +44 (0) 7590 809 101
Clare Cavana +44 (0) 7751 742 072
Isabel Batchelor +44 (0) 7731 988 857

The person responsible for arranging this announcement on behalf of Diageo is Randall Ingber, General Counsel and Company Secretary.

Note to Editors

About Diageo

Diageo is a global leader in beverage alcohol with an outstanding collection of brands across spirits and beer categories. These brands include Johnnie Walker, Crown Royal, J&B and Buchanan's whiskies, Smirnoff and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.

Diageo is a global company, and our products are sold in nearly 180 countries around the world. The company is listed on both the London Stock Exchange (DGE) and the New York Stock Exchange (DEO). For more information about Diageo, our people, our brands, and performance, visit us at www.diageo.com. Visit Diageo's global responsible drinking resource, www.DRINKiQ.com for information, initiatives, and ways to share best practice.

Celebrating life, every day, everywhere.

About Asahi

Asahi is a global leader offering a diverse collection of brands centered on beer, alcohol and non-alcohol beverages, and food. Our mission is to deliver on our great taste promise and bring more fun to life. Established in Japan in 1889, the Group has always been committed to innovation and quality. This dedication has brought together iconic brands and the expertise of renowned breweries from around the world, including those with a rich heritage spanning over centuries. Our approach has culminated in a globally recognized portfolio of brands that includes premium beers such as Asahi Super Dry, Peroni Nastro Azzurro, Kozel, Pilsner Urquell, and Grolsch. "Make the world shine" articulates Asahi Group's commitment to build connections among people, thereby paving the way for a sustainable future together. Through these connections, we can contribute to a brighter world, both today and in the future. With a global presence primarily in Japan & East Asia, Europe, Asia Pacific, we provide over 10 billion liters of beverages to consumers worldwide and generate revenues of over JPY 2.9 trillion annually (c. USD 19bn). Headquartered in Japan, Asahi Group Holdings is listed on the Tokyo Stock Exchange.

About EABL

EABL is a regional leader in beverage alcohol with an exceptional collection of brands across beer and spirits. Although the business is concentrated on three core markets of Kenya, Uganda and Tanzania, its products are sold in more than 10 countries across Africa and beyond. The brands are an outstanding combination of local jewels and international premium spirits. These include among others Tusker, Guinness, Bell Lager, Serengeti Lager, Kenya Cane, Chrome Vodka, Johnnie Walker, Captain Morgan and Smirnoff.

EABL's performance ambition is to be one of the best performing, most trusted and respected consumer products companies in Africa. It is proud of the brands that it makes and the enjoyment that they give to millions. EABL is passionate about alcohol playing a positive role in society as part of a balanced lifestyle.

ENDS

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

SOURCE: Diageo PLC

View the original press release on ACCESS Newswire

FAQ

What stake did Diageo sell in EABL and UDVK and to whom?

Diageo agreed to sell its 65% stake in EABL and its 53.68% direct stake in UDVK to Asahi.

How much will Diageo receive from the sale of EABL (NYSE:DEO)?

Estimated net proceeds after tax and transaction costs are $2.3bn.

What is the implied valuation multiple and enterprise value for EABL?

The transaction equates to about 17x adjusted EBITDA and implies a $4.8bn enterprise value for 100% of EABL.

When is the EABL sale expected to close and are approvals required?

Completion is subject to regulatory approvals and is expected in H2 2026.

How will the sale affect Diageo's leverage (NYSE:DEO)?

Diageo expects the disposal to de-lever the balance sheet by about 0.25x.

What were EABL's FY2025 financial metrics reported for the year ended 30 June 2025?

EABL reported $996m net sales, $258m EBITDA, $94m net income and $229m net debt for FY25.