Diageo to raise stake in EABL to 65 percent

EABL parent company Diageo is set to raise its stake in the firm to 65 per cent as it moves to underpin its presence on the continent.

Diageo has subsequently proposed to acquire an additional 118.4 million shares in EABL through the Diageo Kenya Limited, lifting its stake in the brewer from the current 50.03 per cent.

The parent firm is set to pay Ksh.192 for the additional shares which will increase its grip in EABL.

Diageo has nevertheless applied for exemption from the requirement to make a take-over offer for the firm, with the approval set to see the UK based firm retain minority shareholders in EABL.

“Diageo regards East Africa as one of its strategic growth markets that will help Diageo to fulfil its ambition to be one of the best performing, most trusted and respected consumer products companies in the world,” Diageo said in disclosure statement.

“The proposed acquisition by Diageo Kenya of the additional shares in consistent with Diageo’s African growth and active portfolio management. This transaction will enhance Diageo’s exposure to the East African growth opportunity.”

The offer is subject to approvals by the Capital Markets Authority (CMA) including the exemption from making a takeover offer.

The purchase of the additional shares is set to close in two phases, the first at the close of business on February 17 and the second on March 10, 2023.

Diageo’s offer for EABL shares at a premium of Ksh.192 has raised interest in minority shareholders looking to offload their shares in the firm with EABL’s share price having closed at a low Ksh.138 on Thursday.

Diageo adds to the number of foreign firms looking to firm up their stakes in local subsidiaries.

Lender Standard Group has for instance over the past few years bought more shares into Stanbic Holdings Plc while keeping minority shareholders on board.