Guinness brewer Diageo (DGE.L) is set to acquire FTSE 100 rival SABMiller's (SAB.L) 20 per cent stake in Kenya Breweries in a deal worth around £137 million.

The $225 million deal will rest on the disposal by Diageo subsidiary East African Breweries of its 20 per cent stake in Tanzania Breweries.

The deal will also see Kenya Breweries end a brewing and distribution agreement with SABMiller International, which will see it halt distribution of its brands.

According to East African Breweries, its Kenyan business showed the greatest growth in its half year results to February 2011.

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