Kenya’s High Court has temporarily prevented Diageo from completing the transfer of its controlling 65% stake in East African Breweries PLC to Japan’s Asahi Group Holdings, extending uncertainty around one of East Africa’s largest recent corporate transactions.
The court order preserving EABL’s ownership structure requires the company’s ownership and control to remain as they stood on June 18, 2026 while two separate processes continue: an appeal before the Capital Markets Tribunal and the Competition Authority of Kenya’s review of the acquisition.
Importantly, the ruling does not stop those regulators from doing their work. Instead, it prevents the final transfer of control while the outstanding legal and regulatory questions are resolved.
Key Overview
- The High Court has temporarily blocked completion of Diageo’s proposed 65% EABL stake sale to Asahi.
- EABL’s ownership must remain as it stood on June 18, 2026 while outstanding proceedings continue.
- CAK is still reviewing the transaction under Kenya’s competition framework.
- The Capital Markets Tribunal is considering an appeal against the decision allowing Asahi to avoid a mandatory offer to EABL’s minority shareholders.
- Diageo expects the transaction to generate approximately $2.3 billion in net proceeds after tax and transaction costs.
- Asahi intends to retain a 65% stake and keep EABL listed rather than acquire the remaining publicly held shares.
- The ruling does not cancel the deal but delays completion until key regulatory and legal processes are addressed.
Court Preserves EABL Ownership While Reviews Continue
Justice Francis Gikonyo ordered that the status quo surrounding EABL’s ownership be maintained while regulators and the tribunal complete their respective processes.
The latest ruling allows CAK to continue assessing the acquisition and permits the Capital Markets Tribunal appeal to proceed, while preventing Diageo and Asahi from completing the ownership transfer in the meantime.
The dispute was brought by shareholder Christine Irungu, who has raised questions around transparency, disclosure, minority shareholder protection and the conduct of regulators overseeing the proposed sale.
Irungu’s challenge also examines Diageo’s earlier decision to increase its EABL interest from about 50.03% to 65% through a tender offer conducted in 2022 and 2023.
Official regulatory records show that the 2023 tender offer involved up to 118.4 million EABL shares and received approval alongside an exemption relating to the additional acquisition.
The petitioner is questioning whether investors received sufficient information during that earlier process given Diageo’s subsequent decision to sell its enlarged controlling position.
Diageo has rejected the suggestion that the tender offer formed part of a pre-arranged plan to build a larger stake before selling it.
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Minority Shareholders Are Central to the Dispute
A major issue is whether Asahi should be required to make an offer to EABL investors who own the remaining 35% of the listed brewer.
When Asahi originally announced the transaction, it acknowledged that acquiring Diageo Kenya Limited would give it indirect control over 65% of EABL and could ordinarily trigger takeover requirements.
Asahi subsequently sought exemptions because it wanted to maintain EABL’s existing listed shareholder structure rather than acquire the publicly traded minority stake.
Capital-markets regulators in Kenya, Uganda and Tanzania approved those exemptions in May. Asahi later confirmed that its mandatory takeover exemption had been accepted and said it had no intention of increasing its EABL ownership beyond 65%.
The Kenyan exemption is now being challenged before the Capital Markets Tribunal.
Under Kenya’s takeover framework, acquiring effective control of a listed company can trigger obligations to make an offer to other shareholders, although regulators have powers to grant exemptions in specified circumstances.
For minority shareholders, the appeal is significant because an exemption means they do not automatically receive an opportunity to sell their shares on the same transaction through which the controlling shareholder exits.
$2.3 Billion Transaction Remains Incomplete
Diageo announced the Asahi agreement in December 2025 as part of a wider strategy to dispose of selected non-core assets and reduce debt.
Under the agreement, Asahi will acquire all of Diageo Kenya Limited, which holds 65% of EABL, together with Diageo’s direct interest in spirits producer UDV Kenya.
Diageo expects the sale to generate about $2.3 billion in net proceeds after taxes and transaction costs, while the agreement implies an enterprise value of approximately $4.8 billion for 100% of EABL.
The transaction would represent a major expansion into Africa for Asahi. The Japanese brewer has said it intends to preserve EABL’s existing brands while introducing products from its own portfolio and maintaining EABL’s listings in Kenya, Uganda and Tanzania.
Long-term licensing agreements are also expected to allow EABL to continue producing and distributing brands connected to Diageo after ownership changes.
CAK Review Is Now a Critical Remaining Step
Competition approval in Kenya remains one of the transaction’s most important outstanding requirements.
EABL said in August that the deal had already received competition clearances in Uganda and Tanzania, alongside capital-markets approvals across the three East African jurisdictions, leaving the Kenyan competition review as the key outstanding regulatory process before completion.
The High Court specifically declined to prevent CAK from continuing that assessment. Instead, its order preserves the existing ownership arrangement so that a final transfer does not overtake regulatory or tribunal proceedings.
That means the Asahi transaction has not been cancelled. But Diageo cannot complete the change of control until the relevant legal and regulatory processes progress sufficiently to satisfy the court’s order.
For EABL investors, the immediate focus therefore shifts to the Capital Markets Tribunal’s treatment of the takeover exemption and CAK’s final competition determination. Those outcomes will help determine whether one of East Africa’s biggest corporate ownership changes can finally proceed.
Sources: Capital FM / Business Daily / Diageo / Asahi Group Holdings / East African Breweries / Capital Markets Authority / The Star
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