Diageo has hired Goldman Sachs and Bank of America(BofA) to conduct a strategic review of its 65% holding in East African Breweries PLC (EABL), a move that could culminate in a sale and would extend the group’s shift to an asset‑light beer model across Africa. The mandate, first reported by Bloomberg, follows a string of African brewery exits while retaining control of the Guinness brand under long‑term licences. The Drinks Business framed the potential divestment as part of a broader retreat from African beer.
EABL’s audited FY2025 results (year ended 30 June 2025) underscore the asset’s scale: net revenue rose 4% to KSh 128.8bn (USD ~997m) and profit after tax increased 12% to KSh 12.2bn (USD ~94m). Profit before tax reached KSh 19.3bn (USD ~149m) and the board proposed a total dividend of KSh 8.00 per share, up 14% year‑on‑year. (USD conversions use the Central Bank of Kenya’s 31 July 2025 rate of KSh 129.24 per USD.)
EABL operates breweries and distilleries in Kenya, Uganda and Tanzania, and sells into more than ten African markets. Its portfolio includes heritage beers Tusker and Bell Lager, local spirits such as Kenya Cane, and licensed production and distribution of Guinness. In Tanzania, EABL’s Serengeti unit competes as the No. 2 brewer in a market led by TBL; industry references place Serengeti’s share in the mid‑teens.
The prospective EABL transaction would follow multiple Diageo disposals on the continent while preserving brand rights: Meta Abo Brewery in Ethiopia (inside.beer, 25.1.2022), Guinness Cameroon (inside.beer, 14.7.2022), Guinness Nigeria (inside.beer, 12.6.2024), Guinness Ghana (inside.beer, 29.1.2025), and Seychelles Breweries (inside.beer, 2.4.2025 ). Diageo had earlier lifted its EABL stake to ~65% in 2023 (inside.beer, 27.1.2023).
Valuation expectations vary. A Nairobi brokerage’s 2025 outlook pegged EABL’s equity value at about USD 2.79bn—around 2.35x its then enterprise value—implying Diageo’s 65% could fetch close to USD 2bn on a change of control. Drinks media have floated Heineken, Castel Group, and AB InBev as logical suitors, though no bidders have been confirmed.
Regulatory and consumer‑trend headwinds form part of the backdrop. Kenya’s government and NACADA have signalled a new national policy that would raise the minimum legal drinking age to 21 (up from 18 under the current Alcoholic Drinks Control Act), alongside broader restrictions—measures still requiring enabling legislation to take full effect. At the same time, illicit alcohol and pressure on disposable incomes continue to challenge formal beer volumes across the region, a theme EABL highlighted in its results commentary.
At group level, Nik Jhangiani, newly appointed interim CEO of Diageo (inside.beer, 17.6.2025), reiterated cost‑saving and deleveraging goals with FY2025 results on 5 August, lifting the savings target to USD 625m while maintaining the “Accelerate” plan—first outlined in December 2024—to generate roughly USD 3bn of annual free cash flow by 2026. Diageo’s shares have remained materially down over the past year amid tariff and demand pressures.
