Asahi Group Holdings is to pay $2.3bn for Diageo’s business in Kenya, which includes the UK group’s majority stake in East African Breweries.

The Super Dry brewer is buying Diageo’s 65% stake in East African Breweries (EABL) and its 53.7% shareholding in Kenyan spirits group UDVK.

Earlier this year, it was reported Diageo had hired banking advisers to carry out a review of EABL, which markets beer brands including Tusker and Serengeti Lager.

Asahi said the business “offers high growth potential and stable profitability”. Until now, the Peroni brand owner has exported to Africa. The deal marks Asahi's first acquisition of assets in the region.

The Japanese group added: “Our objective is to establish a foundation for medium- to long-term growth by acquiring a leading platform in Kenya and the east African market, which is expected to deliver long-term growth driven by population increase and economic expansion.”

The sale is not the first Diageo has made in Africa this year. In February, the company agreed a deal to offload its stake in the publicly listed Guinness Ghana Breweries to French drinks group Castel for $81m.

That transaction followed other disposals in Africa. In 2024, the Tanqueray gin owner offloaded its shareholding in publicly-listed Guinness Nigeria to Singapore-based consumer group Tolaram. Two years earlier, Diageo sold its Guinness brewing operation in Cameroon to Castel.

Under the terms of the deal with Asahi, Diageo said it would “enter into long-term licensing agreements as well as transitional service agreements” with EABL. There will be new deals for EABL to produce Diageo spirits brands including Smirnoff and Captain Morgan as well as Guinness under licence.

Nik Jhangiani, Diageo’s interim CEO, had said in May the group could make “substantial changes” to its product portfolio in the form of asset disposals even after the sale of a clutch of spirits brands in recent years and the previous transactions in Africa.

He said today: “This transaction delivers both significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet. We remain committed to returning the group to well within our target leverage ratio range of 2.5 to three times through disposals of non-strategic, non-core assets, alongside delivering positive operating leverage, and tighter capital discipline.”

Asahi said it would maintain the listing status of the publicly traded EABL and does not plan to take its stake beyond 65%.

CEO Atsushi Katsuki added: “This business is a high-quality, leading company in Kenya, Uganda, and Tanzania, with an unrivalled brand portfolio and marketing capabilities, state-of-the-art production facilities and strong market shares. Together with its excellent management team and employees, we will pursue sustainable growth and medium- to long-term enhancement of corporate value, while contributing to the development of the local economies.”