By Market Intelligence Team
Reports from within the beverage industry suggest that Anheuser-Busch InBev (AbInBev), the world’s largest brewer, has expressed interest in acquiring the beer division of East African Breweries Limited (EABL), a subsidiary of Diageo PLC. Sources indicate that AbInBev’s proposal may also include producing some Diageo beer brands and selected spirits under contract manufacturing arrangements.
This development comes against the backdrop of earlier reports naming Castel Group and Heineken as the leading contenders in discussions around EABL’s beer portfolio. Industry insiders now claim that AbInBev has tabled a significant offer to Diageo, raising the stakes in what could become one of the most consequential transactions in East Africa’s beverage sector.
If the deal were to proceed, it would mean that Uganda Breweries Limited (UBL), an EABL subsidiary, and Nile Breweries Limited (NBL), which is majority-owned by AbInBev, would be controlled by the same global parent. This would bring two of Uganda’s flagship beer brands—Bell Lager (UBL) and Nile Special (NBL)—under a single corporate umbrella for the first time.
However, competition experts warn that such an outcome would face significant regulatory hurdles. The Competition Act of 2023 in Uganda, alongside oversight by the COMESA Competition Commission and the Kenyan and Tanzanian authorities, is designed to prevent market dominance and protect consumer choice. Analysts note that a merger of UBL and NBL would substantially reduce competition in the Ugandan beer market, likely triggering a formal investigation and potentially leading to remedies such as divestitures.
According to people familiar with the matter, legal teams from both AbInBev and Diageo have begun preliminary assessments on how to navigate regulatory risks. Some observers argue that AbInBev’s sudden entry into the conversation may also serve as a strategic move to accelerate or influence negotiations with Castel and Heineken. By introducing a heavyweight competitor into the bidding process, Diageo could increase its bargaining power and potentially secure a higher valuation for EABL’s beer assets.
At this stage, the talks remain informal and highly speculative. Neither Diageo, AbInBev, Heineken, nor Castel Group have issued official statements confirming or denying their interest in the transaction. Market watchers caution that while behind-the-scenes discussions are ongoing, any eventual deal will need to clear multiple layers of scrutiny before becoming reality.
For now, the industry waits to see whether AbInBev’s reported interest is a serious acquisition attempt or a tactical play in Diageo’s broader exit strategy from parts of its African beer business.