Tanzania: Diageo to buy an additional 30% stake in SBL

Diageo owned East African Breweries (EABL) from Kenya wants to increase its stake in Tanzania’s second largest brewer Serengeti Breweries (SBL) from 55% to 85%. “EABL intends to enter into a conditional transaction to purchase an additional 30 percent shareholding in Serengeti Breweries. Completion of the transaction is subject to various regulatory approvals in Kenya and Tanzania,” EABL said in a cautionary statement to shareholders.

The intended purchase was not disclosed. However, EABL bought last year 4% of SBL for KES 313 million (USD 3 million) (inside.beer, 31.1.2020), which values 30% at about USD 22.5 million.

SBL accounts for 15% of the branded beer market in Tanzania by volume and when combined with EABL's portfolio the share is approximately 28%. Market leader is AB InBev with its subsidiary Tanzania Breweries located in Tanzania’s commercial capital Dar es Salaam. In March 2018, AB InBev announced to invest USD 100 million in a new brewery in Dodoma, Tanzania’s capital (inside.beer, 20.3.2018).

SBL has three operating plants spread out across the country; the Dar Es Salaam plant has a production capacity of 350,000 hl, the Mwanza plant a capacity of 650,000 hl while the state-of-the-art brewery in Moshi which was commissioned in January 2012 has a production capacity of 500,000 hl expandable to 800,000 hl.

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