The High Court in Nairobi has issued an 11-day freeze on the final sale of British multinational Diageo’s Sh296.7 billion stake in East African Breweries Limited (EABL) to Japan’s Asahi Group.
This is even though EABL clarified that the transaction—pending regulatory approvals in Kenya, Uganda, and Tanzania—is unlikely to conclude before mid-2026.
The conservatory order followed an urgent application by Bia Tosha Distributors Limited, which seeks to block the sale amid a long-running dispute over beer distribution rights.
Bia Tosha Distributors Limited warehouse at Industrial Area, Nairobi, on December 7, 2015.
Photo credit: File | Nation Media Group
The court barred Kenya Breweries Limited, UDV (Kenya) Limited, EABL, Diageo PLC, and Cogno Ventures Ltd from finalising the share transfer until January 20, 2026, to preserve Bia Tosha’s petition.
However, the court allowed regulatory and preliminary processes for the transaction to continue uninterrupted, declining to halt approval applications by the state agencies.
EABL’s legal team emphasised that the $2.3 billion deal is a complex cross-border transaction requiring lengthy statutory approvals, meaning completion remains distant.
The court dispute is based on beer distribution agreements between Bia Tosha and companies within the Diageo group.
Bia Tosha alleges that Kenya Breweries and UDV (Kenya) unlawfully terminated its distribution agreements in 2016 and withheld a Sh38 million goodwill refund, violating competition laws.
The distributor argues that Diageo’s exit would leave it without recourse to enforce future court rulings, as Diageo is UK-based.
Through lawyers Ken Kiplangat and Kiragu Kimani, Bia Tosha warned that without court intervention, the share sale would prejudice its petition by disposing of key assets.
But EABL and Diageo’s legal team, led by Njoroge Regeru, opposed the freeze, calling Bia Tosha’s application "misconceived."
In an affidavit, Diageo’s General Counsel Anthony David William Smith stated the sale involves “shareholder-level assets”, not Kenyan operations, and dismissed concerns over enforceability, citing Diageo’s $48 billion market capitalization and compliance with Kenyan jurisdiction.
"The application has no substance and is based on misconceptions. There is no risk that any judgment against Diageo PLC, a multi-national company of over US$48 billion market capitalisation, which has submitted to this jurisdiction, and which intends to retain assets in this jurisdiction, would be unenforceable," said Mr Smith.
Mr Smith noted the deal’s completion hinges on 2026 regulatory approvals and warned that even a brief injunction risked “irreversible consequences”, including $2.3 billion in losses and market instability for the UK- and US-listed firm.
He told the court the transaction concerns “upstream, shareholder-level assets” and does not involve the sale of Kenyan operating assets.
The court acknowledged the urgency of the Bia Tosha's application but limited the freeze to the share transfer’s finalization, allowing regulatory steps to proceed. The judge noted the interim order would not delay the overall timeline, given the transaction’s scale.
The case resumes on January 20, 2026, for further directions under a new judge.
