Kenya’s High Court has temporarily stopped the proposed KSh340 billion transfer of Diageo’s controlling interest in East African Breweries Limited (EABL) to Japan’s Asahi Group Holdings, introducing a fresh legal hurdle to one of East Africa’s biggest corporate transactions of the year.
The conservatory orders, issued pending full court proceedings, restrain the parties from completing, registering, implementing or giving effect to the transaction involving Diageo’s 65 per cent holding in EABL and its stake in spirits producer UDV Kenya. The ruling also preserves the current ownership and control structure until the court determines the constitutional and public interest questions raised in the petition.
The legal challenge was brought by public interest litigant Christine Irungu, who argues that minority investors were not adequately informed during Diageo’s move to increase its ownership position in EABL from approximately 50.03 per cent to 65 per cent through a tender process conducted between 2022 and 2023. Brandspur Banking News Desk understands that the petition contends the enlarged stake was later positioned for disposal without sufficient disclosure to investors and the wider market.
Court filings further claim the planned sale raises wider concerns around transparency, shareholder rights, regulatory oversight and public accountability. The petitioner is seeking orders compelling disclosure of agreements, transaction records, board approvals, valuation materials, regulatory submissions and related communications tied to the proposed acquisition.
The petition also alleges that regulators may not have fully addressed questions surrounding market fairness and the implications of a control premium generated during Diageo’s earlier stake expansion. Named respondents include Diageo Kenya Limited, Diageo Plc, EABL, Asahi Group Holdings, Kenya’s Capital Markets Authority and Competition Authority, while the Law Society of Kenya has been listed as an interested party.
The latest court intervention adds another chapter to a transaction that has already faced multiple legal attempts to delay or stop completion. Several earlier cases seeking to block the deal had either lapsed or were dismissed by Kenyan courts, allowing regulatory processes to continue before this latest order reopened scrutiny around the transaction.
Diageo agreed to sell its EABL holding to Asahi as part of a broader strategy to reduce debt and refocus capital allocation, while Asahi has positioned the acquisition as a strategic expansion into East Africa’s consumer market. The deal remains one of the most closely watched corporate transactions across the region as investors await the outcome of ongoing court proceedings and regulatory reviews.
