EABL seeks entire shareholding of Ugandan unit with share plan

Martin Oduor-Otieno, EABL Group Chairman, Jane Karuku - Group MD and CEO, Risper Ohaga, Group CFO and Mark Ocitti, Managing Director, Kenya Breweries Limited (KBL) peruse through the company's 2024 Full Year Financial Results. [Courtesy]

East African Breweries Ltd (EABL) plans to increase its shareholding in one of its Ugandan subsidiaries.

The brewer seeks to increase its shareholding in Uganda Breweries Ltd (UBL) to 100 per cent by acquiring 2,177,995 shares.

EABL in a tender offer announcement has offered to purchase UBL’s ordinary shares, which represent 1.81 per cent.

The regional beverage manufacturer holds 98.19 per cent of UBL-issued share capital.

“The tender offer will be a ‘willing buyer, willing seller’ basis with no element of pressure of shareholders who do not want to sell,” reads the tender notice.

Shareholders have an opportunity to tender all or some of their shareholding. If a shareholder wishes to tender all or some of their shareholding in UBL, they need to complete, execute, and return the tender offer acceptance document to the data processing agency - Image Registrars Ltd.

“If any shareholder does not wish to accept the tender offer and wishes to continue to remain a shareholder in UBL, then such shareholder does not need to take further action,” the notice says.

The tender offer opened yesterday and will close on March 3, 2025 at 5pm. The tender offer is open to holders of ordinary shares as of September 2, 2024.

The price offered for each ordinary share is sh194 (Ush5,630). EABL was trading at sh151 (Ush4,388) in the Uganda Securities Exchange yesterday.

As of yesterday, EABL held 118,293,313 ordinary shares in UBL, which represents 98.19 per cent.

“If the tender offer is accepted in full, EABL will hold 120,471,208 ordinary shares, which would represent 100 per cent of UBL’s issued share capital,” reads the notice.

Apart from UBL, EABL also owns 100 per cent of International Distillers Uganda Ltd and 100 per cent of East African Maltings (Uganda) Ltd.

Other subsidiaries under EABL are Kenya Breweries Ltd, East African Maltings (Kenya) Ltd UDV (Kenya) Ltd, Allsopps (EA) Sales Ltd and EABL International Ltd in Kenya.

EABL also owns East African Beverages (South Sudan) Ltd, East African Breweries (Rwanda) Ltd, EABL Tanzania Ltd and Serengeti Breweries Ltd, also in Tanzania.

According to EABL’s latest financial statements, Uganda is the manufacturer’s second market.

In 2023, the brewer’s net sales for that financial year amounted to Sh124.1 billion, which represents a 13 per cent increase from the previous year, with a strong performance in the spirits category observing a 10 per cent growth, while the beer segment experienced growth of 12 per cent.

“Our sales increased in all countries by 15 per cent in Kenya, 12 per cent in Uganda and nine per cent in Tanzania,” the statement reads.

“Kenya remains our largest market, with 65 per cent of sales followed by Uganda, contributing 21 per cent and Tanzania 14 per cent.”

Unlike Uganda, Kenya’s market for EABL has in the recent past been turbulent due to the tax regime, particularly excise duty, that squeezed more from the manufacturer.