Javier Ferran-led Diageo increases stake in Tanzanian alcohol subsidiary, EABL

Editorial Team -

East African Breweries Limited (EABL) has increased its stake in its Tanzanian subsidiary to 85 percent after acquiring an additional 30-percent shareholding in the business for $55 million (Sh5.98 billion).

EABL is a Kenyan-based holding company* that manufactures branded beer, spirits and non-alcoholic beverages. It is majority-owned by Diageo Plc, a British multinational alcohol beverage company based in London.

Javier Ferran has been the chairman of Diageo since 2017. As of 2018, the Spanish businessman held 198,402 shares worth £5.5 million ($7.6 million).

Business Daily reported Diageo as saying that EABL acquired the 30-percent position late last year for $55 million (Sh5.98 billion) in cash and £16 million (Sh2.1 billion) in outstanding loans that it earlier extended to the Tanzanian brewer.

“On 21 October 2020 and on 6 November 2020, EABL completed the acquisition of 13.3 percent and 16.7 percent, respectively, of shares in Serengeti Breweries Limited for a total consideration of $55 million (£42 million) in cash and £16 million in the form of shareholder loans outstanding to EABL,” Diago stated.

EABL’s Tanzania Subsidiary

EABL’s Tanzania subsidiary is primarily known as Serengeti Breweries Limited.

It is the second-largest brewer in the country and holds approximately 15 percent of the bottled beer market, operating three production facilities in Dar es Salaam (300,000 HL), Mwanza (600,000 HL) and Moshi (500,000 HL).

Serengeti is not listed on the Tanzanian bourse, but is cross-listed on the Nairobi Securities Exchange through EABL.

In March 2020, EABL announced plans to increase its stake in Serengeti Breweries after identifying growth prospects on the Tanzanian market.

*A holding company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own shares of other companies to form a corporate group.