Kilimokwanza.org Research Analysis | February 2026

Executive Summary

On 17 December 2025, Japan’s Asahi Group Holdings announced an agreement to acquire Diageo’s 65% controlling stake in East African Breweries PLC (EABL) for approximately US$2.3 billion in net proceeds, implying an enterprise value for EABL of US$4.8 billion. This represents the first time a major Japanese brewer has committed an investment of this scale to the African continent. The deal, expected to close in the second half of 2026 pending regulatory approvals in Kenya, Uganda, and Tanzania, will make Asahi the majority shareholder of East Africa’s largest beer and spirits company.

While the headlines have focused on the financial dimensions of the deal, the acquisition carries profound implications for agriculture across the region. EABL is not merely a beverage company; it is one of East Africa’s most significant agri-industrial anchors, connected to over 100,000 smallholder farmers through barley and sorghum supply chains, and operating East African Maltings Limited (EAML), a critical raw materials processing subsidiary. A change of majority ownership to an entity with a stated global commitment to 100% sustainably sourced barley by 2030 raises important questions — and opens important opportunities — for the region’s agricultural transformation agenda.

The Deal at a Glance

Buyer	Asahi Group Holdings, Ltd. (Japan)
Seller	Diageo PLC (United Kingdom)
Target	65% of EABL via Diageo Kenya Ltd + 53.68% of UDV (Kenya) Ltd
Implied Enterprise Value	US$4.8 billion (approx. Ksh 619 billion)
Net Proceeds to Diageo	US$2.3 billion (approx. Ksh 296 billion)
Valuation Multiple	17x adjusted EBITDA
EABL FY2025 Net Sales	US$996 million (Ksh 128.8 billion)
Countries of Operation	Kenya, Uganda, Tanzania
Expected Completion	H2 2026, subject to regulatory approval
Listing Status	To remain listed on NSE, USE, and DSE

Asahi has committed to maintaining EABL’s stock exchange listings, preserving the existing management team, and retaining all jobs. Diageo will maintain a presence in the region through long-term licensing agreements for global brands including Guinness, Johnnie Walker, and Smirnoff Ice.

EABL’s Agricultural Footprint: A Hidden Giant

To understand the agricultural implications of this acquisition, it is essential to appreciate the scale of EABL’s agricultural operations. EABL is not just a consumer of raw materials; it is a major agricultural ecosystem builder across East Africa.

East African Maltings Limited (EAML)

EAML, a wholly-owned subsidiary of EABL headquartered in Nairobi’s Industrial Area, plays a pivotal role in supplying quality brewing raw materials — malt, barley, and sorghum — to EABL’s brewing units. It operates a barley seed processing plant in Molo, Kenya, and has developed sorghum as a complementary brewing raw material in both Kenya and Uganda. The company sources approximately 80% of its raw materials locally through contract farming arrangements.

Farmer Network and Impact

Contracted farmers (Kenya)	47,000+ sorghum farmers across 10+ counties; plus barley farmers in the Rift Valley
Contracted farmers (Uganda)	40,000+ farmers through “Farm for Success” programme
Total farmer network	Over 100,000 smallholder farmers across East Africa
Annual sorghum demand (Kenya)	~40,000 tonnes
Annual barley demand (region)	60,000+ tonnes
Key sorghum counties (Kenya)	Kisumu, Migori, Siaya, Homa Bay, Busia, Tharaka Nithi, Meru, Narok, Nakuru, Murang’a
Farmer support provided	Free seeds, fertilisers, extension services, technical and financial support
Investment in Uganda sourcing	UGX 45+ billion annually

The sorghum value chain is particularly significant because the crop thrives in semi-arid areas that otherwise lack significant economic activities. EABL’s Senator Keg brand, produced using locally sourced sorghum at the Kisumu brewery (commissioned in 2018 at a cost of Ksh 14 billion), provides sustainable incomes for 17,000 additional farmers and was designed in part to combat the illicit brew market. Kenya’s government has recognised the link between the brewery’s sorghum demand and rural livelihoods through tax policy, providing excise duty relief for beverages made from 100% local raw materials.

Sustainability and Regenerative Agriculture

EABL has progressively embedded sustainability into its agricultural supply chain. Its 2025 Sustainability Report describes a “Grain to Glass” approach, emphasising traceability, regenerative farming practices, and responsible sourcing. In Uganda, the company’s “Water for Life” initiative has brought safe water to over 4,900 households in the Teso sub-region through boreholes and solar-powered water systems — recognising that successful farming depends on access to clean water.

Kenya’s Cabinet Secretary for Agriculture has publicly lauded EABL’s role in providing livelihoods to thousands of farmers and promoting sustainable sourcing, calling for deeper partnerships between the public and private sectors.

Asahi’s Global Agricultural Philosophy

Understanding what Asahi brings to this equation requires examining its global sustainability commitments and track record with agricultural supply chains.

Sustainable Sourcing Commitments

Asahi’s Environmental Vision 2050 outlines a world in which agricultural raw materials are produced through farming that considers the environment, respects human rights, and realises regional revitalisation. More specifically:

• By 2030, Asahi aims to achieve 100% sustainably sourced barley and coffee through certification-based systems.
• Asahi joined the SAI Platform (Sustainable Agriculture Initiative) in 2025, a global industry body for sustainable farming practices. Its CEO of Global Procurement stated: “Joining SAI Platform is one of the key initiatives to step up our efforts on sustainable agriculture.”
• Asahi became the first Japanese company to obtain SBTi (Science Based Targets initiative) certification for both short-term and long-term targets, including FLAG (Forest, Land, and Agriculture) emissions.
• The company has developed a proprietary biostimulant from surplus brewing yeast that, when paired with water-saving cultivation methods, has been shown to boost crop yields and reduce greenhouse gas emissions by up to 65%.

Direct Farmer Engagement

Asahi has demonstrated a consistent pattern of deep engagement with farming communities in its markets:

• In Europe, 100% of the barley used for Asahi’s Czech Republic, Slovak, and Italian operations is sourced locally, with direct relationships with over 1,600 farmers.
• In Italy, Asahi’s Birra Peroni subsidiary launched “Campus Peroni” in partnership with the national agricultural research centre (CREA) and six university agriculture departments, promoting quality and sustainability in the cereal sector.
• In Australia, after acquiring Carlton & United Breweries, Asahi partnered with Riordan Grain Services to create a “paddock to pot” traceability system, including commissioning research on biostimulants and soil health in barley cropping systems.
• In Japan, Asahi has supported community-based barley cultivation on land affected by natural disasters, creating local agricultural industries as part of post-disaster recovery.

This pattern suggests that Asahi is not a passive investor in agricultural supply chains but an active participant seeking to deepen farmer relationships, introduce technology, and embed sustainability standards.

Implications for Agriculture in East Africa

Drawing on EABL’s existing agricultural infrastructure and Asahi’s global approach, the acquisition is likely to produce several significant effects across the region’s farming landscape.

1. Likely Expansion of Local Sourcing

Asahi’s 2030 target of 100% sustainably sourced barley, combined with its demonstrated preference for local sourcing, suggests the company will intensify EABL’s already significant local procurement. EAML currently sources approximately 80% of raw materials locally; there is scope to push this toward full local sourcing. With an annual demand exceeding 60,000 tonnes of barley and 40,000 tonnes of sorghum, any increase in local sourcing percentages translates directly into expanded income for tens of thousands of smallholder farmers in Kenya’s Rift Valley, western Kenya, and Uganda’s eastern regions.

2. Technology Transfer and Agricultural Innovation

Asahi’s track record of deploying agricultural technology in its supply chains is particularly promising for East Africa. The company’s biostimulant derived from brewing yeast — which has been trialled in Australian and Japanese cropping systems — could be adapted for East African conditions, potentially improving yields in the very arid and semi-arid areas where sorghum is grown. In Italy, Asahi’s Peroni brand uses a digital platform (orzobirra.net) providing farmers with weather data, soil conditions, and crop management guidance. A similar platform adapted for Kenya and Uganda could transform the information landscape for EABL’s 100,000+ contract farmers.

3. Sustainability Certification and Market Access

Asahi’s membership of the SAI Platform and commitment to certification-based sustainable sourcing may lead EABL to adopt formal sustainability certification for its East African agricultural supply chains. For smallholder farmers, achieving recognised sustainability certification could unlock access to premium markets beyond the brewing sector, as certified sustainable grain commands price premiums in global commodity markets. This “certification effect” could elevate the commercial status of East African sorghum and barley production.

4. Investment in Water and Climate Resilience

Asahi’s global focus on water stewardship (it has signed the UN CEO Water Mandate and targets reducing water consumption to 3.2 cubic metres per kilolitre by 2030) aligns with EABL’s existing “Water for Life” initiatives. Brewing operations are water-intensive, and climate change is already threatening the productivity of barley and sorghum in East Africa. Asahi’s resources and technical expertise could accelerate investment in water infrastructure, drought-resistant varieties, and climate-smart agricultural practices across EABL’s farming zones.

5. Potential for New Crop Value Chains

Asahi’s broader portfolio includes non-alcoholic beverages and food products. In Japan, the company has used craft beer production to create value chains for otherwise underutilised agricultural products. Asahi’s entry could catalyse the development of new crop value chains in East Africa, including for non-alcoholic beverages, health foods, and other products that leverage the region’s rich agricultural diversity. The company’s mention of introducing brands like Asahi Super Dry and Peroni to the region could also open conversations about malting barley varieties that could be grown locally rather than imported.

6. Strengthened Farmer Finance and Aggregation

EABL’s existing model of contract farming with guaranteed purchase provides a critical financial safety net for smallholder farmers. Asahi’s resources and global supply chain expertise may strengthen and formalise these arrangements. In Australia, the company’s partnership with grain storage and logistics businesses created a fully integrated “paddock to pot” system. A similar approach in East Africa could strengthen the role of bulking agents and farmer cooperatives, improve post-harvest handling, reduce losses, and create more transparent pricing mechanisms.

Risks and Concerns

While the acquisition presents significant opportunities, several risks warrant attention:

Transition Uncertainty

Any ownership transition creates a period of uncertainty. Farmers who depend on EABL’s contract buying may face anxiety about whether new ownership will honour existing commitments. Asahi’s public commitment to maintaining operations and jobs is encouraging, but concrete reassurance to farming communities is essential.

Cultural and Operational Distance

Asahi has no prior operational experience in Africa. Its agricultural programmes have been developed for European, Japanese, and Australian farming contexts that differ significantly from East African smallholder systems. Successfully adapting its sustainability and technology approaches to the realities of subsistence-oriented farmers in Busia, Tharaka Nithi, or Teso will require deep local knowledge and patience.

Import Substitution Pressure

EAML still imports a portion of its barley requirements. If Asahi introduces new premium brands that require specific malting barley varieties not currently grown in East Africa, there is a risk that import dependency could increase rather than decrease. Regulators and agricultural stakeholders should monitor the composition of raw material sourcing as Asahi’s portfolio strategy for the region evolves.

Policy and Excise Sensitivity

The sorghum value chain is particularly sensitive to excise duty policy. When Kenya imposed a 50% excise duty on Senator Keg in 2013, sorghum purchases collapsed and thousands of farmers lost their market. While the exemption was later reinstated, this episode illustrates how agricultural impacts are mediated through policy. Asahi’s entry does not change this vulnerability, and governments in the region must ensure tax policies remain supportive of local sourcing.

Diageo’s Exit Pattern

Diageo’s sale of EABL is part of a broader retreat from African beer markets, having exited Ghana, Nigeria, Cameroon, and Ethiopia. This pattern raises questions about the perceived attractiveness of African markets to global beverage companies. While Asahi views East Africa as a growth market, its willingness to invest in agricultural infrastructure over the long term will be the true test of commitment.

Strategic Implications for Agricultural Stakeholders

For Governments

• Maintain and strengthen excise duty frameworks that incentivise local raw material sourcing.
• Engage Asahi early on agricultural policy alignment, including climate-smart agriculture, water infrastructure, and farmer extension services.
• Use the transition as an opportunity to negotiate enhanced local content commitments as part of regulatory approvals.
• Support agricultural research institutions to develop barley and sorghum varieties that meet Asahi’s quality and sustainability standards.

For Farming Communities and Cooperatives

• Strengthen aggregation and bargaining capacity in anticipation of potentially higher sustainability standards.
• Engage proactively with EAML and county governments to secure continuity of contract farming arrangements during the transition period.
• Explore pathways to sustainability certification that could open broader market access beyond the brewing sector.

For Agricultural Development Organisations

• Position the Asahi-EABL transition as a case study for private sector-led agricultural transformation in Africa.
• Explore partnerships with Asahi around technology transfer, particularly biostimulant applications and digital farmer advisory platforms.
• Monitor and document the agricultural outcomes of the ownership transition to inform future cross-border agricultural investment policy.

For the Broader Agri-Business Sector

Asahi’s entry into East Africa at a US$4.8 billion enterprise valuation sends a powerful signal about the value of vertically integrated agri-industrial platforms in the region. Companies across the food and beverage sector should take note: the premium Asahi is paying reflects not just brand value and consumer markets, but the depth and quality of EABL’s agricultural supply chain. The deal validates the model of investing in local sourcing and farmer partnerships as a source of competitive advantage and long-term corporate value.

Conclusion

The Asahi-EABL acquisition is far more than a corporate ownership transfer. It represents a potential turning point for agriculture across Kenya, Uganda, and Tanzania. EABL’s embedded agricultural ecosystem — connecting over 100,000 smallholder farmers to stable markets through barley and sorghum value chains — is now in the hands of a company with a global mandate for 100% sustainably sourced barley, a track record of deep farmer engagement, and significant technological resources.

The opportunities are substantial: expanded local sourcing, technology transfer, climate resilience investment, sustainability certification, and potentially new crop value chains. But these opportunities will only materialise if Asahi invests in understanding the unique context of East African smallholder agriculture and if regional governments and agricultural stakeholders engage proactively to shape the terms of this transition.

In an era when many multinational companies are retreating from African markets, Asahi is leaning in — and it is doing so by acquiring what is arguably the most deeply rooted agri-industrial platform in East Africa. How this plays out over the next five years will be a defining case study for the relationship between foreign direct investment and agricultural transformation on the continent.

Sources

Diageo Press Release, 17 December 2025; Asahi Group Holdings Official Announcement, 17 December 2025; EABL Corporate Website and Sustainability Report 2025; The Japan Times, 18 December 2025; BeverageDaily, 18 December 2025; People Daily Kenya, 18 December 2025; EUCORD – East African Sorghum Value Chain Development Project; SAI Platform – Asahi Group Membership Announcement, May 2025; Asahi Group Sustainability Report 2024; Asahi Europe & International – Sustainable Sourcing; The Exchange Africa, 19 December 2025.