Diageo has floated a proposal to acquire up to an additional 118,394,897 ordinary shares in East African Breweries Limited (EABL), representing 14.97% of the issued share capital of EABL.
The price payable for each ordinary share tendered in the proposed tender offer is Ksh192.00, meaning the company will spend at least Ksh22.7 billion to acquire the stake.
If the Tender Offer is accepted in full, Diageo Kenya will hold 514,003,331 ordinary shares in EABL, which would represent 65% of the issued share capital of EABL.
Currently, Diageo Kenya holds 395,608,434 ordinary shares in the capital of EABL, which represents 50.03% of the issued share capital of EABL. Diageo Kenya therefore currently has effective control of EABL within the meaning of the Take-over Regulations.
“Diageo Kenya (and its parent company, 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 is a global leader in beverage alcohol with an outstanding collection of brands across beer and spirits. Diageo’s strategic priorities — sustain quality growth; embed everyday efficiency; invest smartly; promote positive drinking; champion inclusion and diversity; and pioneer grain-to-glass sustainability support the achievement of this ambition,” Diageo said in a statement.
According to the company, the transaction will enhance Diageo’s exposure to the East African growth opportunity.
“It is a demonstration of Diageo’s long-term confidence in EABL and in the East African alcoholic and non-alcoholic beverage market and economy, generally. Furthermore, Diageo’s indirect shareholding in EABL of 50.03% is lower than the average shareholding of approximately 66.9% held by multinational parent companies in listed subsidiaries in Kenya. It is also lower than the average shareholding for other listed subsidiaries of Diageo in Africa such as in Guinness Nigeria and Guinness Ghana Breweries Limited where Diageo indirectly holds a 58.02% and 80.4% stake, respectively,” added Diageo.
Diageo Kenya intends to maintain EABL’s listing on the Nairobi Securities Exchange following completion of the tender offer, as it believes the interests of EABL’s shareholders and the broader public would be best served by EABL remaining a company listed on the Nairobi Securities Exchange and available to be invested in by the Kenyan public.
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