Kenya High Court delays hearing on bid to block Diageo’s US$2.3B EABL sale to Asahi 

KENYA – Kenya’s High Court has postponed a hearing on an application seeking to halt the sale of Diageo’s Kenyan business interests to Japan’s Asahi Group Holdings, while allowing the transaction’s regulatory processes to continue. 

In December, Asahi agreed to acquire Diageo’s 65% stake in East African Breweries Limited (EABL) and its 53.7% shareholding in Kenyan spirits group UDVK for US$2.3 billion. The transaction is part of Diageo’s plan to divest its controlling interests in the East African market. 

Earlier this week, Bia Tosha, a former distributor for Diageo in Kenya, applied for an ex parte injunction to block the sale. The application was filed amid an ongoing legal dispute between Bia Tosha and Diageo’s Kenyan businesses. 

Presiding judge Bahati Mwamuye said the parties to the deal could continue with preliminary steps, including seeking regulatory approvals, provided the transaction is not finalised before January 20, when the court is expected to issue further directions. 

EABL said the court’s decision is not expected to affect the timeline of the transaction. Diageo previously stated that it anticipates completing the deal in the second half of this year. 

“The court expressly ordered that the regulatory approval process and preliminary steps for the transaction should proceed uninterrupted,” EABL said in a statement. “The judge recognised the significance of the transaction and declined to paralyse these essential statutory processes.” 

Earlier this week, Bia Tosha asked the High Court to stop the deal, citing unresolved litigation with Diageo’s Kenyan entities. The legal dispute dates back to 2016 and involves EABL and its subsidiary Kenya Breweries, arising from disagreements over a distribution contract. 

In response, EABL reiterated that the litigation is unrelated to the proposed sale. “We welcome the court’s decision to allow the regulatory phases of this transaction to continue,” the company said.  

“We reiterate that the substantive case is a legacy commercial dispute regarding local distribution routes and has no factual or legal connection to the shareholding of our parent company.” 

The High Court is expected to provide further guidance on the matter later this month. 

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