East African Breweries Limited’s Tanzania subsidiary Serengeti Breweries Limited (SBL) will wait until 2018 to be taken over UK brewing giant Diageo.
Diageo owns 98.2% of Uganda Breweries and East African Breweries a bigger 51 per cent stake in the firm which the UK brewers insist is not yet mature due to the heavy investments being made by its shareholders.
“The option for Diageo to acquire the remaining stake in Serengeti Breweries Limited has been extended to 2018 by mutual agreement between Diageo and SBL’s other principal shareholders,” said Diageo in an e-mail response to the Business Daily.
“EABL has invested considerably in bolstering its brands, securing distribution and establishing a solid platform from which to grow its beer and spirits business in this attractive market. As this continues to be an investment period, it was appropriate that the option be extended,” added Diageo.
Analysts reckon that Diageo’s purchase price could have been far much lower than the maximum targeted buyout price of Sh51.6 billion had it bought the 49 per cent stake this month given that the Tanzanian brewer was yet to break even.
EABL bought 51 per cent of SBL in 2010 at a cost of Sh4.8 billion.
Diageo’s plan to acquire SBL comes as the multinational increasingly eyes new deals in the region. In 2011 the firm made a direct bid for a state-owned brewer in Ethiopia, dashing EABL’s hopes of entering the market.