UGANDA – East African Breweries Ltd (EABL) has announced its intention to increase its shareholding in its Ugandan subsidiary, Uganda Breweries Limited (UBL), by acquiring the remaining 1.81 percent stake.
The Kenyan-based brewer currently holds a 98.19 percent stake in UBL.
In a tender notice, EABL stated that the offer would be made on a “willing buyer, willing seller” basis, ensuring no pressure on shareholders who choose not to sell their shares.
“If any shareholder does not wish to accept the tender offer and wishes to continue to remain a shareholder in UBL, then such shareholder does not need to take further action,” the notice clarified.
The tender offer is available to all holders of ordinary shares as of September 2, 2024, and will close on March 3, 2025, at 5 pm.
EABL has set the purchase price for each ordinary share at UGSH5,630 (US$1.51). Should the tender offer be fully accepted, EABL would acquire 120,471,208 ordinary shares, resulting in 100 percent ownership of UBL.
EABL’s decision to pursue full ownership of UBL aligns with its broader strategy of consolidating its assets in key markets.
The company also holds complete ownership of International Distillers Uganda Ltd and East African Maltings (Uganda) Ltd. Uganda remains a crucial market for EABL, contributing significantly to its financial performance.
According to EABL’s latest financial statements, Uganda is the company’s second-largest market after Kenya.
In the financial year ending in 2023, EABL reported net sales of KES124.1 billion (US$963.88M), marking a 13 percent increase from the previous year.
The company observed strong growth in its spirits category, with a 10 percent increase, while the beer segment grew by 12 percent.
In terms of regional sales, Kenya accounted for 65 percent, followed by Uganda at 21 percent, and Tanzania at 14 percent.
EABL’s move to acquire the remaining stake in UBL mirrors the actions of its parent company, Diageo, which in March 2023 increased its stake in EABL from 50.03 percent to 65 percent.
Diageo’s acquisition was executed through its subsidiary, Diageo Kenya, and involved the purchase of an additional 14.97 percent stake, amounting to 118.4 million shares at KES192 9US$1.49) per unit, valuing the transaction at KES22.7 billion (US$176.3M).
The acquisition was completed in two phases, both of which were oversubscribed.
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