Capital markets regulators in Kenya, Uganda, and Tanzania have approved Asahi Group Holdings’ acquisition of East African Breweries PLC (EABL) shares from Diageo plc without triggering a mandatory takeover offer.
The announcement was made by Asahi’s legal and financial advisers at the global and local levels, A&O Shearman, ENS, Nomura and Absa. The applications for exemption had been made to the Capital Markets Authority of Kenya (CMA), Capital Markets and Securities Authority of Tanzania (CMSA) and Capital Markets Authority of Uganda (CMA-U).
“Asahi hereby announces that each of the CMA, the CMSA and the CMA-U has granted an exemption from the requirement to make a mandatory take-over offer for EABL in Kenya, Tanzania and Uganda (as applicable) under the Kenya Take-over Regulations, the Tanzania Take-over Regulations, and the Uganda Takeover Regulations respectively,” the company said.
Asahi Group Holdings, a multinational alcohol and beverage company, will now proceed with the transaction without having to buy out minority shareholders, which means that EABL remains listed. The exemptions also signal regulators’ satisfaction that the transaction would not disadvantage minority shareholders.
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Because EABL is listed on the Nairobi Securities Exchange and cross-listed on the Dar es Salaam Stock Exchange and the Uganda Securities Exchange, Asahi was required to secure regulatory approval across all three markets.
With the takeover exemptions now secured, the ball shifts squarely to East Africa’s competition regulator including, the Competition Authority of Kenya, Fair Competition Commission of Tanzania and Ministry of Trade, Industry and Cooperatives in Uganda.
Those authorities will now determine whether the transaction raises concerns relating to competition, market dominance and consumer welfare within the East African alcoholic beverages sector. The transaction proposes the acquisition of the whole of Diageo plc’s 65% shareholding in EABL together with its 53.7% stake in UDV Kenya Limited (the spirits business).
Valued at approximately USD 2.3 billion (about Ksh 297 billion), the deal marks a significant step in Asahi’s expansion into Africa’s fast-growing alcoholic beverages market through EABL, one of East Africa’s largest brewers with operations and distribution networks spanning Kenya, Uganda, and Tanzania.
Asahi had stated when the transaction was announced that it is keen on retaining EABL as listed and retain its identity. EABL will also continue selling and distributing its brands as well as the brands made by or licensed by Diageo PLC.
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