Global drinks manufacturer Diageo, which owns Guinness, has announced plans to sell its 100% stake in Diageo Kenya Limited, which makes up 65% of the shares in its East African Breweries (EBL) business, to Japanese company Asahi.

The deal will cost around £1.8bn and is expected to be completed in the second half of calendar year 2026.

The move is part of the drinks group’s strategy to streamline its operations by disposing of non-core assets to strengthen its financial performance.

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Nik Jhangiani, interim CEO of Diageo said: “This transaction delivers both significant value for Diageo shareholders and accelerates our commitment to strengthen our balance sheet.

“We remain committed to returning the group to well within our target leverage ratio range of 2.5 – 3.0x through disposals of non-strategic, non-core assets, alongside delivering positive operating leverage and tighter capital discipline.”

As part of the transaction, Asahi plans to maintain the local brands while introducing products from its portfolio to the East African market.

Diageo plans to enter a long-term licensing agreement with EABL to continue the production and distribution of Guinness, locally manufactured spirits and ready-to-drink brands.

According to the company, EABL plans to benefit from the merger through Asahi’s advanced production facilities and strong partnerships with employees, local partners and customers.

The announcement comes as Diageo has been driving a turnaround strategy following a mixed performance. It recently reported a slight decrease of 2.2% in net sales in its most recent financial results and cut guidance on its future growth, citing weak sales in the US and China markets.