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Diageo offers $215.94m to EABL to purchase KBL from SABMiller

Diageo's Kenyan subsidiary East African Breweries Limited (EABL) has secured a loan of KES19.5bn ($215.94m) to buy back its subsidiary, Kenya Breweries Limited (KBL), in which SABMiller holds 20% stake.

EABL is in turn selling its 20% stake in TBL, which was earlier owned by SABMiller, through a public offering and is expecting to receive KES7bn ($77.51m), Business Daily Africa reported. After purchase of the stake in TBL, EABL will be able to operate a wholly owned subsidiary in Kenya.

The two transactions will end the alliance which was formed around ten years ago between the two global brewers. The battle between the two giants in the Tanzania, Uganda and Kenya beer markets is growing tougher.

EABL is trying to strengthen its foothold in the Tanzania market through its subsidiary Serengeti Breweries, which is said to be the second largest brewer in the country.

The company is reportedly going to commission a new plant in Moshi, which is anticipated to nearly double Serengeti's brewing capacity. EABL's beer brand portfolio includes Tusker, President, Bell, Windhoek, White Cap, Pilsner, Tusker Malt and Senator.

On the other hand, SABMiller has recently come up with plans to invest $260m to expand capacity in its subsidiaries in Uganda, Ghana, Zambia and Tanzania. The group has seen growth of 34% this year in the African market through its signature brand, Castle Premium Beer.

29 Nov. 2011

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