East African Breweries Limited (EABL) has secured overwhelming shareholder backing.
At its 103rd virtual annual general meeting – even as speculation intensifies over Diageo’s planned scale down – EABL, on September 11, drew a record 2,640 shareholders from across several countries.
It was more than triple the usual turnout, underscoring heightened investor interest amid global headlines about Diageo’s portfolio exit strategy.
Near-unanimous mandate
Every resolution on the agenda passed with resounding support.
Shareholders confirmed an interim dividend of UGX67.6, and gave the green light to a final dividend of UGX148.7 per share.
This will be payable in October and brings the total payout for the year to June 2025 to UGX216.4.
Board elections were similarly decisive. Independent directors like Ory Okolloh cleared near-unanimous margins.
While Diageo-aligned nominees — including Leo Breen, Hina Nagarajan, and Andrew Ross — also sailed through with comfortable 97–98%.
Shareholders further endorsed a suite of new governance policies covering corporate disclosure, communication, and board remuneration.
The resounding approval show a strong mandate for continuity at a time of uncertainty around the parent company’s strategy.
Profitable but in play
That confidence rests on a solid set of fundamentals.
For the year ended June, EABL’s net earnings rose 12% to UGX330 billion ($94.4 million), reversing two years of slowed growth.
A stronger Kenyan shilling flipped the group from a foreign-exchange loss to a gain, while lower interest rates cut financing costs.
Net revenue surged by 4%, with Kenya, Uganda, and Tanzania all delivering growth.
With brands like Tusker, Bell, and Kenya Cane entrenched across the region, and a 14% foothold in Tanzania’s fast-growing beer market, analysts value EABL at up to $2.8 billion.
It is more than double its current Nairobi market capitalisation of about $1.4 billion. Diageo’s 65% stake could fetch as much as $2 billion if sold.
The numbers explain why speculation has quickly focused on likely suitors.
Heineken, Castel, and AB InBev are all viewed as natural contenders, each with strategic reasons to expand in East Africa.
For any global brewer, this is an asset that offers scale, cash flow, and demographic upside.
Energy Ministry Orders UEDCL Board to Investigate Top Management Over Performance GapsThe Diageo dilemma
For investors, the puzzle is why Diageo would even consider stepping back from such a profitable business.
The answer lies less in EABL’s performance and more in the parent’s global repositioning.
Under its “Accelerate” programme, Diageo seeks to generate $3 billion in free cash flow annually by 2026.
It is freeing up capital for debt reduction, share buybacks, and spirits-focused investments.
Beer in Africa — while profitable — no longer fits neatly into that strategy.
In recent years, Diageo has sold Guinness Ghana to Castel, exited Nigeria and Cameroon, and divested from Ethiopia’s Meta Abo Brewery.
But it has retained rights to the Guinness brand, which it views as a global priority.
Leadership upheaval has added urgency. In July, Diageo replaced CEO Debra Crew after two bruising years that saw the company scrap long-held sales targets, issue a profit warning, and lose more than 40% of its market value.
With interim CEO Nik Jhangiani under pressure to deliver a clearer roadmap, asset sales have become part of the conversation.
Balancing confidence and uncertainty
EABL itself has been careful to project calm. At the AGM, management repeated that it has “not initiated, approved, or been part of any transaction to sell any part of our business”.
It also reaffirmed its policy of not commenting on market speculation.
But the approval of new communication and disclosure policies hints at a company preparing for more intense investor scrutiny in the months ahead.
Shareholders also used the AGM to push management on innovation, including whether the brewer plans to introduce health-conscious beverages such as dry red wine.
However, EABL noted that it remains committed to adapting its portfolio, pointing to existing low- and zero-alcohol products, ready-to-drink lines, and initiatives like Senator Keg, which provides affordable, safe beer and helps curb illicit alcohol trade.
For now, the message to investors is clear: EABL is profitable, shareholder-aligned, and well run.
But the larger question — whether Diageo stays or goes — will be decided in London, not Nairobi.
If Diageo ultimately chooses to divest, the AGM results send an unmistakable signal to potential acquirers.
The buyer would be inheriting a business with robust earnings, strong governance, and a shareholder base fully on board with management.
