Diageo Considers EABL Sale Amid Exit From African Beer Markets

Bloomberg has reported that British multinational Diageo has appointed Bank of America and Goldman Sachs to oversee a review of its 65% stake in East African Breweries Limited (EABL).

The review suggests a possible exit of Diageo from its last major African beer operation.

The two investment banks will evaluate EABL’s value and explore structural scenarios, including a full or partial divestment.

They will also review a possible spinoff, licensing agreements, or joint ventures.

This review aligns with Diageo’s broader global strategy shift toward an asset-light model.

It seeks to boost operational efficiency and unlock capital. 

In May 2025, Chief Financial Officer Nik Jhangiani announced $500 million cost-cutting programme.

He also indicated the company’s intention to offload non-core assets by 2028.

The plan targets an increase in annual free cash flow to $3 billion, up from approximately $2.6 billion.

Industry analysts from Bernstein and Jefferies have identified EABL as Diageo’s last significant brewing investment in Africa.

They argue that the company’s brand equity makes it a valuable asset and a logical candidate for divestment.

EABL continues to perform relatively well compared to other African assets, but has not been spared from regional challenges.

In the 2024 financial year, its profit after tax declined by 12%, even as net sales rose to $958 million.

The company’s performance suffered due to adverse currency movements and elevated borrowing costs. 

Meanwhile, Diageo’s global share price has fallen nearly 24% in the past 12 months.

This has prompted investor concern over softening alcohol demand in mature and emerging markets alike.

Despite these pressures, EABL showed signs of resilience in the first half of the 2025 financial year.

Profit after tax surged by 19.6% to $61 million, while finance costs declined by more than 14%.

Product volumes across Kenya, Tanzania, and Uganda recorded steady growth.

The company’s flagship brands, Tusker, Bell, and White Cap, continue to enjoy strong loyalty and market penetration in East Africa.

The review could result in a $2 billion deal, a significant premium over EABL’s current market capitalisation of $1.2 billion.

If structured as a sale of the beer business alone, such a transaction would be not only Diageo’s largest divestment in Africa but one of the biggest private-sector deals in East Africa.

Sources familiar with the matter told Bloomberg, potential bidders include Heineken, AB InBev, and Castel Group.

The deal may also attract private equity firms and institutional investors with an appetite for strong cash-generating consumer businesses.

However, no formal expressions of interest have been made public, and the review process remains exploratory for now.

Diageo’s retreat from brewing in Africa has been gradual but deliberate.

Over the past three years, it has divested from Guinness in Ghana, Nigeria, Cameroon, Seychelles Breweries, and Ethiopia’s Meta Abo Brewery.

In most cases, Diageo has retained ownership of its global brands under long-term licensing arrangements with local partners.

EABL, therefore, stands as its final major footprint in African brewing.

The implications of a potential ownership change at EABL are significant.

The company’s extensive footprint means any sale would impact employment, local suppliers, distributors, and tax revenue streams across the region.

Regulatory bodies, including competition authorities and capital markets regulators in Kenya and other jurisdictions, are expected to examine any proposed transaction closely.

Given EABL’s status as a blue-chip counter on the Nairobi Securities Exchange, the move also raises broader capital market considerations.

Investors will be watching closely for how any deal affects valuation benchmarks.

While regulatory precedents and the perception of East Africa as a destination for multinational capital will also be on display.

From Diageo’s perspective, the potential sale would support its financial restructuring agenda, including plans to reduce net debt to between 2.5 and 3 times EBITDA by 2028.

Diageo’s leadership has also reiterated that while it may divest physical operations in Africa, it remains committed to its core premium brands such as Guinness.

For EABL’s management, the period ahead may involve a significant transition.

New investors could introduce changes in strategy, pricing, governance, supplier relationships, and branding.

The company’s leadership will need to carefully manage such shifts, particularly in terms of localisation, distribution, and cost efficiency.

Bank of America and Goldman Sachs will lead the next phases of the review.

This includes detailed financial valuation, strategic scenario modelling, and the coordination of any formal engagement with potential buyers.

No timetable has been set, but market analysts say conclusions could be drawn by the end of 2025.

The unfolding review represents more than just a corporate deal.

It signals a critical juncture for the region’s capital markets, consumer goods industry, and multinational presence.

If the deal proceeds, it will serve as a bellwether for how global investors view long-term opportunities in Africa’s consumer sector.

Ultimately, Diageo’s potential exit from EABL may mark the end of an era for one of East Africa’s most iconic businesses.

But it also opens a new chapter in which regional investors, regulators, and business leaders must navigate the shifting dynamics of global capital.