Diageo will sell its 65% stake in EABL to Japan’s Asahi for $2.3bn (Sh297bn), reshaping East Africa’s beer market.

NAIROBI / LONDON, Dec. 17 — British spirits maker Diagoo Plc. has agreed to sell its 65 percent controlling its 65 percent controlling stake in East African Breweries Ltd (EABL) to Japan’s Asahi Group Holdings in a transaction valued at about $2.3 billion (roughly Sh297 billion), a deal that will redraw ownership of one of East Africa’s most strategic consumer goods companies.

The transaction, announced on Tuesday, will see Diageo exit direct equity ownership of EABL after more than five decades, while retaining a commercial presence in the region through long-term brand and licensing arrangements. The deal is expected to close in the second half of 2026, subject to regulatory approvals across Kenya, Uganda and Tanzania.

Strategic reset for Diageo

Diageo said the disposal forms part of a broader strategy to simplify its portfolio, strengthen its balance sheet and focus capital on faster-growing premium spirits categories globally.

“This transaction delivers significant value for shareholders and further accelerates our commitment to deleveraging,” Diageo interim chief executive Nik Jhangiani said in a statement, adding that the sale is expected to reduce net debt leverage by around 0.25 times.

The London-listed group, which owns global brands including Johnnie Walker, Smirnoff and Guinness, said it will continue to participate in East African markets through licensing agreements covering Guinness and selected spirits and ready-to-drink products.

Analysts say the move reflects Diageo’s growing focus on capital discipline as global alcohol consumption slows in some mature markets amid inflationary pressures and changing consumer preferences.

Asahi’s Africa expansion

For Asahi, Japan’s largest brewer by revenue, the acquisition marks a decisive entry into sub-Saharan Africa, a region viewed by global beverage groups as a long-term growth frontier due to demographics, urbanisation and rising disposable incomes.

“Asahi sees EABL as a high-quality business with strong brands, leading market positions and deep roots in its communities,” Asahi president and CEO Atsushi Katsuki said, noting that the group intends to invest for sustainable, long-term growth.

Asahi said it plans to retain EABL’s existing listings on the Nairobi Securities Exchange, Uganda Securities Exchange and Dar es Salaam Stock Exchange, preserving local and regional investor participation.

A regional heavyweight

Founded in 1922, EABL dominates beer and spirits markets in Kenya, Uganda and Tanzania through brands such as Tusker, Bell Lager, Serengeti and Pilsner, and operates major breweries in Nairobi, Kampala and Dar es Salaam.

For the financial year ended June 30, 2025, EABL reported net sales of $996 million, EBITDA of $258 million and net profit of $94 million, according to company filings. Net debt stood at approximately $229 million.

Deal analysts estimate the transaction values EABL at an enterprise value of about $4.8 billion, equivalent to roughly 17 times EBITDA, a multiple that reflects both its dominant market position and the scarcity value of scaled consumer businesses in East Africa.

Market reaction

Shares of Diageo rose modestly in early trading in London following the announcement, while EABL shares gained on the Nairobi bourse as investors welcomed clarity on the brewer’s long-term ownership.

“This is a clean exit for Diageo at an attractive valuation, while Asahi gains a rare platform in a high-growth region,” said a Nairobi-based equity analyst who follows consumer stocks.

Regulatory and political lens

The deal will undergo scrutiny from competition authorities in the three core EABL markets, where the brewer plays a major role in employment, tax revenues and agricultural supply chains, particularly barley and sorghum sourcing from smallholder farmers.

Kenya’s Treasury and trade officials are also expected to examine the transaction’s implications for local manufacturing and exports, given EABL’s status as one of the country’s largest listed companies and taxpayers.

A changing global drinks landscape

Diageo’s exit from EABL follows earlier divestments across Africa, including sales of breweries in Cameroon, Ghana and Ethiopia, as multinational drinks firms recalibrate portfolios in response to tighter capital markets and shifting consumption patterns.

At the same time, Asian groups such as Asahi, Kirin and Suntory have been stepping up overseas investments to offset slower growth at home.

What comes next

Once completed, the transaction will mark one of the largest cross-border acquisitions in East Africa’s consumer sector, potentially ushering in new investment, technology transfer and governance changes at EABL.

For now, investors and regulators will be watching closely to see how Asahi balances global ambitions with EABL’s deeply rooted local brands — and how Diageo’s strategic retreat reshapes its footprint on the African continent.

Naivas plans an 80% rise in outlets as strong consumer demand powers Kenya’s biggest retail expansion.

Retail Growth Driven by Consumer Demand

Kenya’s largest supermarket chain, Naivas, is targeting a major expansion of up to 80% more outlets, reflecting strong nationwide consumer demand. According to a Bloomberg report and corroborated by Business Daily Africa, the retailer aims to increase its footprint from 111 stores to nearly 200 over the next several years.

The chain has benefited from Kenya’s rising disposable income, urbanisation, and growing preference for modern retail formats. Analysts say this expansion positions Naivas as a dominant player in a market still recovering from the collapse of legacy chains such as Nakumatt, Uchumi, and Tuskys.

Leadership Transition Marks New Era

Naivas’ aggressive growth coincides with a leadership change. Long-serving CEO David Kimani stepped down in October 2025 after guiding the company through a transformative decade. Kimani will remain as an adviser to the board and the founding Mukuha family, according to Business Daily.

He said at the time:

“Naivas was built for Kenyans, and our mission has always been to bring modern retail closer to every household. The fundamentals are strong, and this is the right time to scale.”

Succeeding him is Andreas von Paleske, Naivas’ first non-family CEO. Von Paleske highlighted the retailer’s strong foundations:

“Naivas has built an unmatched bond with Kenyan households. Our priority now is to scale this trusted model with discipline and ambition.”

Business Daily noted that von Paleske’s appointment signals a professionalisation of management aimed at sustaining long-term growth.

Investor Backing Enables Expansion

The planned growth is supported by IBL Group, IFC, and Proparco, who have all invested in Naivas’ recent funding rounds. Bloomberg and Business Daily report that IBL Group chairman Arnaud Lagesse described Naivas as:

“A remarkable retail success story rooted in strong values, operational excellence, and deep understanding of the Kenyan consumer.”

IFC emphasised that Naivas supports “thousands of direct and indirect jobs” and plays a critical role in local supply chains, from farmers to logistics providers.

Targeted Store Rollouts

Naivas will focus expansion on second-tier towns and rapidly growing urban corridors. Target counties include Nakuru, Kiambu, Uasin Gishu, Machakos, and Mombasa, while urban neighbourhoods in Nairobi such as Ruiru, Ruai, Kamulu, and Athi River are also on the shortlist.

Business Daily reports that these areas are experiencing strong population growth and rising middle-class income, creating ideal conditions for modern retail.

Supply Chain and Jobs Impact

Naivas is one of Kenya’s largest private-sector employers with more than 10,000 staff. Analysts project that the expansion could generate an additional 7,000–8,000 jobs, spanning retail operations, logistics, merchandising, and distribution.

FMCG executives praise Naivas’ reliability, noting that it is “more predictable and data-driven than almost any other chain in East Africa,” according to Business Daily. Local suppliers also benefit from the chain’s growing footprint, which strengthens regional supply chains and improves market access.

Outlook for Kenya’s Retail Sector

Despite macroeconomic challenges such as inflation and rising logistics costs, Naivas’ leadership remains confident. Von Paleske told Bloomberg:

“Retail demand in Kenya remains robust. Our focus is to execute with excellence, invest prudently, and deliver consistent value to customers nationwide.”

Analysts predict that if executed effectively, Naivas’ 80% expansion will cement its position as Kenya’s leading retailer and potentially a regional powerhouse in East Africa.

Kenya’s Gulf Energy to begin oil output from South Lokichar Basin by 2026 after securing government approval.

Gulf Energy to Begin Kenya Oil Production by 2026

Kenya’s long wait to produce its own oil may soon end. Gulf Energy Ltd. has received government approval to launch production from Tullow Oil’s South Lokichar fields by the end of 2026.

Happening five months since Tullow oil exited kenya,the endorsement from the Ministry of Energy and Petroleum marks a new phase in Kenya’s journey toward energy independence. It also reflects the government’s determination to attract private investment into the extractive sector, especially through local partnerships.

Unlocking a Long-Stalled Project

Located in Turkana County, the South Lokichar Basin was discovered in 2012 by Tullow Oil plc. It contains an estimated 560 million barrels of recoverable crude. However, years of uncertainty, poor infrastructure, and financing setbacks delayed progress.

With Gulf Energy now stepping in, optimism has returned. The company — a member of the Gulf Energy Group — plans to inject fresh capital, local expertise, and renewed confidence. The move aligns closely with President William Ruto’s Bottom-Up Economic Transformation Agenda (BETA), which emphasizes domestic investment and industrialization.

Target Output and Funding

Production is expected to begin with a pilot phase in late 2026, followed by full-scale operations targeting about 60,000 barrels per day (bpd).

To achieve this, Gulf Energy plans to invest roughly US$3.4 billion in field development, crude gathering systems, and an export pipeline connecting Turkana to the Lamu Port through the Lamu Port–South Sudan–Ethiopia Transport (LAPSSET) corridor.

This pipeline will finally allow Kenya to export crude directly from its coastline. Energy Cabinet Secretary Davis Chirchir praised the approval, noting its importance to national development.

“We are converting discovery into value. This initiative will create jobs, attract investors, and boost energy security,” Chirchir said.

Economic Impact and Job Creation

The project is expected to create over 2,500 direct jobs and stimulate thousands of indirect opportunities. Moreover, new roads, schools, and water systems will enhance living standards in Turkana County.

Kenya currently spends more than KSh 640 billion (US$5 billion) each year on fuel imports, according to Central Bank of Kenya data. Local oil production could reduce that burden while easing pressure on the shilling.

Energy economist George Muchiri from the University of Nairobi believes this project will reshape Kenya’s economy.

“Local production improves the balance of payments and builds investor confidence,” he said. “It shows Kenya’s capacity to run complex energy ventures.”

Local Ownership and Policy Alignment

Gulf Energy’s participation highlights a deliberate policy shift. Under the Petroleum Act 2019, Kenya promotes domestic participation in natural resource projects.

While Tullow Oil retains technical oversight, Gulf Energy provides the financial muscle and implementation capability. Regional lenders and sovereign wealth partners are also expected to join, deepening local ownership.

According to Muchiri, this collaboration signals progress.

“Allowing a Kenyan company to take the lead builds credibility,” he explained. “It’s a strong step toward energy self-reliance.”

Challenges Along the Way

Despite the positive outlook, the project faces key hurdles. Building the export pipeline could take at least three years, and negotiations with international financiers are ongoing. In addition, community compensation and environmental assessments must be concluded before construction begins.

Nevertheless, global oil prices above US$80 per barrel make Kenya’s reserves commercially viable. Analysts from Wood Mackenzie say African frontier producers can achieve profitability if they manage logistics and costs efficiently.

Regional Context and Opportunity

Kenya’s oil push coincides with Uganda’s plans to start output in 2026 through the Lake Albert Development Project, led by TotalEnergies SE. Together, both countries could transform East Africa into a key oil-producing hub.

Furthermore, the development may accelerate growth around the LAPSSET corridor, connecting inland oil fields to the Indian Ocean and linking Kenya, Ethiopia, and South Sudan through trade and energy.

Strategic Importance for Kenya

If Gulf Energy delivers on schedule, Kenya will join the ranks of Africa’s oil producers for the first time. The project could generate hundreds of millions in annual revenue and attract renewed confidence in Kenya’s resource potential.

Cabinet Secretary Chirchir emphasized the broader vision behind the project.

“This venture is about transformation, not just extraction,” he said. “It represents Kenya’s readiness to compete regionally and globally.”

Conclusion

Gulf Energy’s approval to develop the South Lokichar fields revives a project that once seemed lost. It brings Kenya closer to realizing its petroleum ambitions and diversifying its energy base. With the right execution, the initiative could redefine Turkana’s economy, strengthen national revenues, and place Kenya firmly on the global oil map.