• Kenyan court dismisses challenge to Diageo’s sale of EABL to Asahi

• Ruling removes major legal risk tied to long-running distributor dispute

• Deal marks a strategic shift for Diageo and expansion move for Asahi

Kenya’s High Court has cleared the main legal obstacle to Diageo’s planned sale of East African Breweries Limited (EABL) to Japan’s Asahi Holdings, a $2.3 billion deal that ranks among the largest M&A transactions in the country’s history.

In a ruling issued on April 9, Justice Bahati Mwamuye dismissed a petition filed by local distributor Bia Tosha, which had sought to block the transaction over an ongoing commercial dispute dating back to 2016.

The judge dismissed the plaintiff’s application dated January 5, 2026, and lifted any remaining measures that could delay the deal. The decision clears the way for the transaction to move forward, with completion expected in the second half of 2026.

London-listed Diageo, known for brands such as Johnnie Walker and Captain Morgan, announced in December that it had agreed to sell its 65% stake in EABL to Asahi as part of a broader effort to cut debt and revive growth.

The transaction also includes the sale of Diageo’s full stake in Diageo Kenya Limited and 53.68% of United Distillers Vintners Kenya (UDVK), another beverages subsidiary.

That restructuring had prompted Bia Tosha to go to court earlier this year. The distributor, which has been locked in a legal dispute with Diageo, EABL, and UDVK since 2016 over alleged anti-competitive practices, argued that completing the sale would make it harder to enforce any future judgment against the companies. It sought to have the deal suspended.

The High Court initially classified the case as urgent and scheduled a preliminary hearing, raising concerns about potential delays. With Thursday’s ruling, much of that legal uncertainty has now been removed.

A turning point for Diageo—and an entry for Asahi

For Diageo, the sale of EABL is part of a broader restructuring of its African operations, as it shifts toward a lighter, asset-based model focused on brand licensing and local partnerships.

In recent years, the group has carried out a series of targeted divestments. These include the sale of Guinness Cameroon to France’s Castel in 2023, the transfer of its stake in Guinness Nigeria to Singapore-based Tolaram in 2024, and the sale of its majority stake in Seychelles Breweries to Phoenix Beverages, a unit of Mauritius-based IBL Group, in 2025. That same year, Diageo also sold its controlling interest in Guinness Ghana Breweries to Castel. In each case, it retained ownership of key brands while putting in place licensing and royalty agreements.

Against that backdrop, the EABL deal serves multiple goals: raising cash to reduce debt, reassuring investors after a period of underwhelming performance, and reshaping its African presence into a less capital-intensive model.

For Asahi, the move reflects a more aggressive push into international markets. The Tokyo-based brewer has identified regions such as Africa and South America as key growth engines as it looks to diversify beyond its mature domestic market.

When the deal was announced, CEO Atsushi Katsuki highlighted EABL’s strong brand portfolio, marketing capabilities, and established production base. By taking control of the regional group, Asahi gains a strategic foothold in a market where beer consumption is still expanding and where there is room for premiumization.

Espoir Olodo