Diageo hires advisors to carry out strategic review of East African Breweries

Beverage group Diageo has selected advisors to carry out a strategic review of East African Breweries, in which it holds a 65% stake.

Diageo is a leading global producer of premium alcoholic beverages, with a diverse portfolio that includes iconic brands such as Guinness, Johnnie Walker, and Tanqueray. Headquartered in London, the company operates in over 180 countries, focusing on beers, spirits and non-alcoholic drinks.

The distilling major is said to be looking to move to an asset-light operating model to generate more capital for boosting growth, according to reporting from Bloomberg. Part of that strategy may see the company sell its stake in East African Breweries.

Headquartered in Nairobi, Kenya, East African Breweries is made up of several businesses: Kenya Breweries, Uganda Breweries, International Distillers Uganda, Serengeti Breweries, United Distillers Vintners (Kenya) and East African Maltings.

Bloomberg cites that Diageo’s top management has selected bankers and advisors from Bank of America and Goldman Sachs to carry out the strategic review of East African Breweries.

The sale may only feature the beer business, which would be valued at around $2 billion. Other breweries like Heineken, Castel Group and Anheuser-Busch InBev are said to be interested in acquiring part or all the East African business. All three groups declined to comment on the news.

Diageo has offloaded other assets in Africa this year. In January, it sold its stake in Guinness Ghana to Castel Group, and in April it offloaded its 54% share of Seychelles Breweries to Mauritius-based Phoenix Beverages for roughly $80 million.

Earlier this month, Diageo revealed that CEO Debra Crew was stepping down “by mutual agreement” in July, having held the top position for two years. CFO Nik Jhangiani stepped in on an interim basis as the company looks for a new chief executive.