Acquisition

RNS Number : 2907W

Diageo PLC

27 July 2009

 



27 July 2009

Diageo's East African subsidiary, East African Breweries Limited, issues statement in respect of Tanzania operations to Kenyan stock exchange

East African Breweries Limited (EABL), a subsidiary of Diageo, has issued a cautionary announcement that on 16 July 2009 it entered into a conditional agreement to acquire a substantial interest in a Tanzanian company, Serengeti Breweries Limited (SBL), from existing shareholders for an undisclosed sum.

EABL has also given notice to terminate its existing brewing and distribution agreement with Tanzania Breweries Limited, for the manufacture and sale of its brands in Tanzania. Issues have arisen between EABL and Tanzania Breweries Limited which are currently the subject of legal proceedings. Therefore, Tanzania Breweries Limited currently remains the sole and exclusive manufacturer and distributor of EABL products in Tanzania.

SBL is Tanzania's second largest brewing operation and maker of the popular Serengeti Lager. SBL currently accounts for 17 per cent of the Tanzanian market by volume, and has grown market share by 10 per cent over the last three years. Serengeti Lager, a premium priced product, is the flagship brand of SBL accounting for 85 per cent of its sales volume. As at 31 December 2008, SBL's total gross assets were 83,438million Tanzanian Shillings (approximately £38million at current exchange rates).

SBL will form an integral part of EABL's East African supply footprint providing additional capacity to Kenya and Uganda. 

Enquiries

For Diageo Investor Relations

Stephen Howe 

[phone]     

[e-mail]     

For Diageo Media Relations

James Crampton    

[phone]
[e-mail]

Notes to editors

• Diageo plc owns 50.03% of EABL, which is listed on the Kenyan, Ugandan and Tanzanian stock exchanges.

• The transaction is conditional on, amongst other things, receipt of approval from the Tanzania Fair Competition Commission and EABL shareholder approval.

About Diageo 

Diageo is the world's leading premium drinks business with an outstanding collection of beverage alcohol brands across spirits, wines, and beer categories. These brands include Johnnie Walker, Guinness, Smirnoff, J&B, Baileys, Cuervo, Tanqueray, Captain Morgan, Crown Royal, Beaulieu Vineyard and Sterling Vineyards wines. 

Diageo is a global company, trading in more than 180 countries around the world. The company is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE). For more information about Diageo, its people, brands, and performance, visit us at Diageo.com. For our global resource that promotes responsible drinking through the sharing of best practice tools, information and initiatives, visit DRINKiQ.com.

Celebrating life, every day, everywhere.

Diageo Africa

Diageo Africa is the trading name for the group of Diageo corporate entities and people who trade in and for the Africa region. Diageo Africa includes all of Diageo's business interest in continental sub-Saharan countries and outlying islands, including Reunion, Mauritius and Seychelles. We operate through wholly or partly owned operations and a range of partnerships and licensing agreements. Diageo Africa region is active in brewing and distilling and our brands are enjoyed in over 40 African countries. The region contributes to nearly a third of Diageo's net sales of beer globally and employs over 4,500 employees. Several of the larger Diageo companies in Africa are quoted on local stock exchanges. All of these companies have active corporate social responsibility programmes, covering initiatives in water, health, education and other areas of value to the communities in which we operate.

East African Breweries Limited is one of the largest beverage companies in the region, with breweries in Kenya and Uganda. Made up of five subsidiaries, Kenya Breweries, Uganda Breweries, Central Glass Industries, East African Maltings and UDV Kenya, the company has been in existence since 1923. Its flagship brands include Tusker Lager, Pilsner, Guinness, Smirnoff Vodka, Johnnie Walker Scotch Whisky, Senator and Alvaro non-alcoholic malt drinks

It is quoted in the three East African bourses and is the second largest company by market capitalisation at the Nairobi Stock Exchange. Through its EABL Foundation, the company has enriched the lives of over two million people across the region in the past three years through the provision of water, education and environmental care to the communities in which it operates.

Serengeti Breweries Limited is the second largest beer company in Tanzania accounting for 17% of the market by volume. SBL currently operates two breweries in Tanzania - one in Dar es Salaam and one in Mwanza - and a third brewery is being built in Moshi. SBL have grown market share by 10 percentage points over the last three years. 85% of SBL sales volume are derived from Premium Serengeti Lager. Other brands are Kick lager, Vitamalt and other brands brewed under license. 

-ENDS-

 

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