Diageo, the London-based multinational alcoholic beverage company, has received regulatory approval to acquire an additional 14.97% of shares in its subsidiary, East African Breweries Plc (EABL). The offer, worth KES 22.73 billion, was made in October 2022 and will bring Diageo’s total stake in EABL to 64%.
Diageo is already the majority controlling shareholder of EABL, holding 50.03% of the company’s issued share capital. The acquisition of these additional shares will further solidify Diageo’s position in the East African market, where EABL is a leading player in the brewing industry.
The tender offer for the additional shares will open on 6th February 2023 and close on 24th February 2023. Results of the closing will be announced on 6th March 2023. A second closing will take place on 17th March 2023, with the announcement of the results on 5th April 2023. The transfer and settlement of shares will commence on 11th April 2023.
EABL Half Year Earnings
EABL on Thursday recently reported KES 57.3 billion ($532 million) in net sales for the half year ending December 31st, 2022, representing a 4% growth compared to the same period last year. However, group volumes declined by 4% YoY as price increases impacted consumer purchasing patterns, mainly in mainstream and value segments.
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The acquisition of these additional shares by Diageo is a strategic move that will allow the company to further expand its presence in the East African market and capitalize on EABL’s strong financial performance. As the brewing industry continues to evolve and adapt to changing consumer trends, Diageo’s increased stake in EABL will position the company well for future growth and success.
Overall, the acquisition of additional shares in East African Breweries Plc by Diageo is a move that will solidify the company’s position in the East African market and allow it to capitalize on the strong financial performance of its subsidiary. With the tender offer set to open soon, shareholders of EABL will have the opportunity to sell their shares to Diageo at a premium price.
