THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
This circular (“Circular”) has been issued by Diageo Kenya Limited and has been prepared in compliance with the requirements of the Capital Markets Act, Chapter 485A, Laws of Kenya and the Capital Markets (Licensing Requirements) (General), Regulations, 2002.
The Capital Markets Authority (“Authority”) has approved the issue of this Circular. However, as a matter of policy, the Authority assumes no responsibility for the correctness of any statements or opinions made or reports contained in the Circular. Approval of the Circular by the Authority is not to be taken as an indication of the merits of the matter disclosed in this Circular or as a recommendation by the Authority to the shareholders of East African Breweries Limited.
If you are in any doubt about the information in this Circular you should consult your investment banker, stockbroker or other professional investment adviser.
Circular
to the shareholders of
East African Breweries Limited (EABL)
on the intra-group transfer of EABL shares from Diageo Holdings Netherlands B.V. and Guinness Overseas Limited to Diageo Kenya Limited
24 July 2020
Dear EABL shareholder
Intra-group transfer of EABL shares from Diageo Holdings Netherlands B.V. and Guinness Overseas Limited to Diageo Kenya Limited
Diageo plc is a multinational alcoholic beverages company, listed on the London and New York stock exchanges with its headquarters in London, England and with subsidiaries and businesses across the globe. Diageo plc indirectly holds 395,608,434 ordinary shares in EABL, representing 50.03% of the issued ordinary shares in EABL, in aggregate. Diageo plc’s indirect holding of these EABL shares is through three indirectly held wholly- owned subsidiaries, namely: (a) Diageo Kenya Limited, which directly holds 338,618,340 EABL shares (42.82%); (b) Guinness Overseas Limited, which directly holds 20,628,804 EABL shares (2.61%); and (c) Diageo Holdings Netherlands B.V., which directly holds 36,361,290 EABL shares (4.6%).
As part of a wider internal group-reorganisation, which aims to further streamline and optimize Diageo plc’s group corporate structure (including by minimizing the chain of entities and number of geographies through which Diageo plc holds shares in its direct and indirect subsidiary companies), it is proposed that each of Guinness Overseas Limited and Diageo Holdings Netherlands B.V. transfer the shares they hold in EABL to Diageo Kenya Limited. The proposed transaction would simplify Diageo plc’s indirect holding structure of EABL shares by consolidating those EABL shareholdings described above into a single indirectly wholly-owned Kenyan subsidiary company, Diageo Kenya Limited.
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Since Guinness Overseas Limited, Diageo Holdings Netherlands B.V. and Diageo Kenya Limited are all indirect wholly-owned subsidiaries of Diageo plc, the proposed transaction will have no impact on the current ultimate beneficial ownership of these transferring shareholdings, which will remain with Diageo plc. Consequently, Diageo plc will remain the ultimate beneficial owner of the entire 50.03% stake in EABL, and, hence, EABL’s ultimate parent company both before and after the proposed transaction.
The proposed transaction will have no impact on any other shareholder in EABL. Diageo Kenya Limited is not required under the Capital Markets (Take-overs & Mergers) Regulations, 2002 or any other law or regulation to make a take-over offer for the shares of EABL that it does not already own or which it will acquire under the transaction described in this Circular. Diageo Kenya Limited confirms that it will not be making a take-over offer for the remaining shares of EABL and Diageo plc confirms that it has no intention to do so as part of the proposed reorganization.
The proposed transaction will not have any impact on the management or board of EABL as constituted and is not expected to impact on the business, operations or finances of EABL.
Approval has been granted by the Authority under the provisions of section 57(e) of the Capital Markets (Licensing Requirements) (General) Regulations, 2002 for the transfer of EABL shares from each of Guinness Overseas Limited and Diageo Holdings Netherlands B.V to Diageo Kenya Limited by way of a private transaction where there is no change in the ultimate beneficial ownership of the shares. The transaction will be settled on an intra-group basis at the weighted average price per share of EABL for the 30 trading days preceding the date of signature of the transaction documents, as is customary for transactions in shares of listed companies outside the stock exchange.
Stanbic Bank Kenya Limited and SBG Securities Limited are the appointed financial advisers for the transaction. Coulson Harney LLP (Bowmans Kenya) are the legal advisers to Diageo plc.
By reason of EABL shares being listed in Tanzania and Uganda in addition to Kenya, notifications of the transactions have been made to the relevant authorities at the Dar es Salaam Securities Exchange and the Uganda Securities Exchange. No additional regulatory approvals are required under applicable law to complete the proposed transaction. Announcements of the transaction will be made in the national press in Kenya as well as in Tanzania and Uganda.
It is anticipated that the transfer of EABL shares described above will be completed within two weeks of the date of this Circular.
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Information on the buyer: Name Diageo Kenya Limited, a company incorporated in Kenya on 11 March 1963 (registered number C.5445)
Registered Address LR No. 1870/1/176, ALN House, Eldama Ravine Close, Off Eldama Ravine Road, Westlands, PO Box 764 00606 Nairobi
Core business Intermediate holding company
Information on the sellers: Name Guinness Overseas Limited, a company incorporated in England and Wales on 24 October 1963 (registered number 00778398)
Registered Address Lakeside Drive, Park Royal, London, London, NW10 7HQ
Core business Intermediate holding company
Name Diageo Holdings Netherlands B.V., a company incorporated in the Netherlands on 28 October 1964 (registered number 24240630)
Registered Address Molenwerf 12, 1014 BG, Amsterdam, the Netherlands
Core business Intermediate holding company
Damon Ansell
Director DIAGEO KENYA LIMITED
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