London, June 25, 2026, 16:09 BST
- Diageo plc (LON:DGE) was down 0.6% at 1,571 pence as of 16:08 BST. Earlier, the FTSE 100 had gained 1.0% at 15:36.
- A Kenyan court has again blocked moves to sell East African Breweries plc (NAI:EABL) to Asahi Group Holdings Ltd (TYO:2502), marking the fourth legal challenge in the process.
- Net proceeds are expected to be about 77% of Diageo’s free cash flow target for fiscal 2026 and 10.6% of the company’s net debt as of December, using company numbers.
Diageo shares fell late Thursday in London, erasing some of the 4.2% rise from the last two days. The stock is still down around 27% from its 52-week high of 2,142 pence.
Sale delay weighs on Diageo’s balance sheet moves The legal holdup matters for Diageo. The company was counting on $2.3 billion in after-tax proceeds to help its balance sheet. Diageo had priced the deal at 17 times adjusted EBITDA, and said after the deal closed, its net debt-to-adjusted EBITDA would drop about 0.25 times.
The price gives Asahi a regional business that’s making money. EABL posted sales of $996 million, EBITDA of $258 million and net income at $94 million for fiscal 2025.
A minority shareholder won the recent order last week. After that, EABL’s lawyers urged Chief Justice Martha Koome to act on what they described as a “proliferation of parallel proceedings” and “apparent forum shopping”. Diageo said it is still confident in the deal. Both sides are sticking with the second-half 2026 completion goal. Reuters
Asahi’s filing points to how a single court order can stall the deal. The buyer agreed to close two linked deals together: $2.354 billion for Diageo Kenya Limited, which owns the EABL stake, and $646 million for Diageo’s direct UDV Kenya holding. Blocking either piece of the structure can freeze the whole transaction.
Diageo will keep a commercial foothold in East Africa under new deals for Guinness and certain spirits. In December, then-interim CEO Nik Jhangiani called the sale one that “accelerates our commitment to strengthen the balance sheet”. Reuters
Goodbody analyst Fintan Ryan said before the deal that regional assets tend to be easier to sell than global brands. He said he thought disposals would likely stay part of Diageo’s drive for a “deleveraged profile”. Reuters
Job cuts are hitting the stock story too. About 150 jobs, or 12.5% of Diageo’s 1,200 staff in Ireland, are said to be on the line. The country’s Department of Enterprise said it got a collective redundancies notice on June 22. Diageo hasn’t confirmed the number.
Diageo posted just a 0.3% bump in fiscal Q3 organic sales, dragged down by a 9.4% drop in North America. CEO Dave Lewis called North America the “biggest challenge” for the group. “It’s early days for Dave, but he does seem to be grasping it,” said Richard Scrope, manager at VT Tyndall Global Select. Reuters
Lewis will deliver Diageo’s full-year results and give a strategy update August 6.
