EABL seeks to acquire an additional 30% stake in Serengeti Breweries

Barely a year after the East Africa Breweries Limited spent Sh313 million ($3 million) to acquire a four percent additional stake in Serengeti Breweries Limited, the company is now seeking to acquire an additional 30 percent stake in Serengeti, in a deal that will expand in the Tanzanian subsidiary.

“EABL intends to enter into a conditional transaction to purchase an additional 30 percent shareholding in Serengeti Breweries. Completion of the transaction is subject to various regulatory approvals in Kenya and Tanzania,” EABL said in a cautionary statement to shareholders.

In the recent past, EABL shareholding in Serengeti has courted controversy in the recent past, with the Tanzanian government aggressively protecting minority shareholders with last year’s contract raising its legal and economic ownership in the subsidiary to 55 percent and 74.5 percent respectively.

Earlier, EABL owned a 51 percent stake in Serengeti but had a larger claim in terms of assets and earnings at 72.5 percent but after it announced the conversation of Sh15.3 billion loans receivable from Serengeti into equity in the year ended June 2018, EABL effective interest in Serengeti rose from 51 percent to 72.5 percent.

However, Tanzanian authorities previously opposed EABL’s acquisition and forced it to pay an unspecified fine to settle the alleged flouting of takeover rules.

It was not immediately clear the price to be paid and the resultant EABL shareholding in the subsidiary.