NAIROBI, Kenya, Oct 14 – Diageo PLC has announced plans to raise its stake in East African Breweries PLC (EABL) to 65 per cent from 50.03 per cent via a partial tender offer.
The firm is offering to buy 118.39 million shares at Sh192, amounting to a 40 per cent premium over the market price.
“Pursuant to Regulation 4(3) of The Capital Markets (Take-overs & Mergers) Regulations, 2002, we hereby announce to the public that we have on 13 October 2022 served on EABL notice of our intention to acquire up to 118,394,897 additional ordinary shares in EABL by means of a tender offer made to all other shareholders of EABL,” the firm said in a statement.
Diageo has been seeking to increase its stakes in African breweries and distilleries. Last year, in neighbouring Tanzania, it raised its equity holdings in Serengeti Breweries.
The resilience shown by EABL during the Covid-19 pandemic combined with vibrant e-commerce growth, Diageo said was a factor that persuaded it to seek an increase in stake.
If approved, Diageo will pump Sh22.73billion to acquire the additional shares in its subsidiary East African Breweries Plc (EABL) by January 2023.
Details of the proposed partial tender offer will be set out in a tender offer document, which will be made available to shareholders of EABL, the firm said.
As of the date of this announcement, Diageo Kenya holds 395,608,434 ordinary shares in the capital of EABL (Ordinary Shares), which represents 50.03 per cent of the issued share capital of EABL Diageo Kenya therefore currently has effective control of EABL within the meaning of the Take-over Regulations.
If the Tender Offer is accepted in full, Diageo Kenya will hold 514,003,331 ordinary shares in EABL representing sixty-five per cent of the issued share capital of EABL.
The FTSE 100 alcoholic beverage company noted that it does not intend to make a takeover offer for EABL and will apply to the Capital Markets Authority(CMA) for an exemption from complying with the requirement to make a takeover offer.
Diageo Kenya also 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.
EABL’s business is concentrated on three core markets Kenya, Uganda, and Tanzania, although its products are sold in more than 10 countries across Africa and beyond.
