KAMPALA — East African Breweries Limited (EABL) sought to reassure investors this week amid market rumours that its majority shareholder, Diageo, may sell its 65 percent stake. At its virtual annual general meeting, held last Thursday, the brewer emphatically stated it had “not initiated, approved, or been part of any transaction to sell any part of our business.”
The speculation was triggered by a Bloomberg report from July indicating Diageo had engaged Goldman Sachs and Bank of America to explore options for its EABL holding potentially to offload it to interested suitors such as Heineken, Castel, or AB InBev. Diageo’s internal shift this year, including a change in its chief executive officer and renewed focus on boosting free cash flow under its “Accelerate” strategy, has added fuel to the whispers.
Despite the uncertainty, EABL’s financials show steady strength. Net earnings for the year ending June rose by about 12 percent to USD 94.4 million, while revenue across Kenya, Uganda, and Tanzania climbed roughly 4 percent. The company is leveraging its strong brand‑portfolio including Tusker, Bell, Kenya Cane, and its market share in Tanzania and is also developing new product lines, including low‑ and no‑alcohol options aimed at health‑conscious and value‑seeking consumers.
Still, the strategic question looms: will Diageo hold onto EABL as a core part of its beer operations, or will it exit to concentrate on more profitable or higher‑growth segments? Analysts suggest the company’s value in East Africa could be closer to USD 2.8 billion, well above its current market capitalization of about USD 1.4 billion.
EABL, for now, is using financial performance and strong market positioning to steady nerves. As investors await a possible decision, the brewer’s assurance that it is “not part of any transaction” has become its chief message.