Kenya’s High Court has dismissed an application by Bia Tosha Distributors Limited seeking to halt Diageo’s planned sale of its majority stake in East African Breweries PLC (EABL) to Japan’s Asahi Group Holdings, clearing the way for the KSh 297 billion ( $2.3 billion) transaction to proceed.
Justice Bahati Mwamuye ruled on April 9 that the petitioner’s notice of motion dated 5th January 2026 is hereby dismissed, and lifted all interim orders that had previously frozen aspects of the deal. The court determined that Bia Tosha failed to meet the threshold required to sustain an injunction against the transaction, noting that blocking the sale would result in greater commercial harm.
Bia Tosha, a major beer distributor for EABL, had approached the court arguing that the sale would undermine its ability to enforce judgments in ongoing contractual disputes with Diageo’s Kenyan operations and adversely affect its distribution rights following the change in ownership. Its lawyer, Kenneth Kipligat, had warned that Diageo’s exit from Kenya would leave the firm with limited recourse. However, the judge held that the issues raised were primarily contractual in nature and could be pursued through separate legal proceedings without interrupting the ownership transfer. The court emphasized that a private commercial dispute between parties does not justify suspending a major corporate transaction of this scale. The underlying dispute between Bia Tosha and EABL will continue independently before the courts.
Transaction Detail
The transaction, announced on December 17, 2025, involves Diageo selling its entire interest in East African operations through two inter-conditional share purchase agreements with a combined equity value consideration of $3 billion. For Diageo Kenya Limited (DKL), the seller is Diageo Holdings Netherlands B.V. while the buyers are Asahi Group Holdings Ltd. and its subsidiary Asahi Europe & International Ltd (AEI). The agreement covers the transfer of 100 percent of the shares in DKL for a consideration of 2,354 million US dollars on an equity value basis, equivalent to approximately 365.2 billion yen. For UDV (Kenya) Limited (UDVK), the seller is Diageo Great Britain Limited and the buyers are again Asahi Group Holdings Ltd. and AEI, with the transfer of 53.68 percent of the shares in UDVK for 646 million US dollars on an equity value basis.
Both agreements are subject to the same conditions precedent, namely receipt of merger control approvals from the Competition Authority of Kenya, the competent authority in Uganda, and the Fair Competition Commission of Tanzania. Through the transaction, Asahi will indirectly acquire Diageo’s 65 percent controlling stake in EABL, a dominant player in beer, spirits, and ready-to-drink beverages across Kenya, Uganda, and Tanzania. The remaining 35 percent of EABL shares are held by public minority shareholders. Asahi has indicated it has no intention of acquiring the publicly traded shares beyond the 65 percent stake and plans to seek exemptions from mandatory takeover offer requirements from the relevant capital markets authorities in Kenya, Uganda, and Tanzania. It also intends to maintain EABL’s listing status on the securities exchanges in the three countries.
The deal timeline shows that Asahi made the decision to acquire the stakes and executed the share purchase agreements on December 17, 2025. Receipt of the relevant merger control approvals is anticipated in the second half of calendar year 2026, with closing of the transaction also expected in the second half of 2026.
The High Court’s April 9 ruling effectively restores the transaction timeline after several months of legal uncertainty. Regulatory approval processes had already been allowed to continue uninterrupted. With the injunction lifted, Diageo is now free to proceed with the sale, subject to the remaining standard regulatory and completion conditions. This marks Diageo’s full exit from its direct interests in EABL and represents a significant ownership transition for one of East Africa’s largest listed companies.
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