Diageo sells stake in EABL to Asahi as part of $2.3 billion deal

Diageo PLC on Wednesday said it has agreed to sell Diageo Kenya Ltd to Japan's Asahi Group Holdings Ltd for USD2.3 billion.

The London-based owner of Guinness and Johnnie Walker whisky said the sale includes its 65% shareholding in East African Breweries PLC and its 54% shareholding in the Kenyan spirits business, UDVK.

Sale proceeds of USD2.3 billion equate to a multiple of 17 times adjusted earnings before interest, tax, depreciation and amortisation, resulting in an implied enterprise value for 100% of EABL of USD4.8 billion.

The transaction will de-lever Diageo's balance sheet by around 0.25 times, the company said.

The sale is "consistent" with a strategy of "appropriate and selective disposals of non-core assets," Diageo said, "strengthening the balance sheet and supporting our previously shared commitment to de-lever."

Interim Chief Executive Nik Jhangiani said: "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."

He said the sale represents "material steps in delivering on this commitment."

Shares in Diageo rose 1.5% to 1,707.00 pence each in London on Wednesday morning.

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.

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