A petition seeking to halt Diageo’s planned exit from Kenya through the sale of the spirits giant’s stake in East African Breweries Limited (EABL) has been filed, with the petitioner citing the risk of frustrating the enforcement of a multibillion-shilling arbitral award.
In an urgent application filed at the High Court, JILK Construction Company Ltd moved to halt the transaction and restrain Diageo from disposing of its stake in EABL.
The petitioner argues that the sale would render a pending arbitral award, valued at approximately Ksh2.45 billion plus interest, effectively unenforceable.
The suit names Diageo PLC, Kenya Breweries Limited (KBL), EABL, and the Competition Authority of Kenya (CAK) as respondents.
Petition to Stop Diageo-Asahi EABL Deal filed
JILK alleges coordinated abuse of court processes, regulatory evasion, and serious violations of employment and labour laws during the execution of the Kisumu Brewery project.
Among the key orders sought, the company is asking the High Court to compel Diageo to deposit Ksh3 billion as security, fast-track the hearing and determination of the suit by April 30, 2026, and
The petitioner also sought the court’s interim conservatory orders to preserve the subject matter pending judgment.
JILK argues that the application requires immediate intervention as regulatory approvals for the sale are expected within the next few months.
“This matter is extremely urgent because its subject matter and the Plaintiff’s quest for substantive justice will be defeated by the impending sale of Diageo PLC’s shares in East African Breweries Limited to Asahi Holdings Company Ltd,” the certificate states.
The application further notes that approvals from regulators, including CAK and the Capital Markets Authority (CMA), are anticipated between May and June 2026, necessitating an expedited determination.
Bia Tosha petition
The JILK petition comes just weeks after Bia Tosha Distributors Limited, a former Diageo distributor in Kenya, separately moved to court seeking to block the same transaction.
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Bia Tosha argues that Diageo’s planned divestment of its majority stake in EABL to Japan’s Asahi Group Holdings should not proceed while long-running legal disputes remain unresolved.
Speaking to Bloomberg on January 7, Bia Tosha’s lawyer, Kenneth Kipligat, warned that once Diageo disposes of its Kenyan assets, the firm would be unable to enforce any judgment against the multinational.
“If they succeed in disposing of their only asset in Kenya, we will not be able to execute a judgment against Diageo,” he said.
The High Court certified the Bia Tosha matter as urgent, with directions issued on January 20 to fast-track the proceedings.
Court allows regulatory process to continue
In a statement following the court’s directions, EABL said the High Court had split the proceedings into two tracks — one addressing the urgent application to stop the share sale, and another dealing with the decade-old distributorship dispute filed in 2016.
While interim conservatory orders were extended to February 26, 2026, the court clarified that regulatory approvals and preparatory steps for the transaction could continue uninterrupted, with only the final transfer of shares temporarily restrained.
EABL maintained that the historical distributorship dispute has no legal nexus to the global Diageo–Asahi transaction and welcomed the court’s decision to fast-track both matters.
The multiple petitions arise in the wake of Diageo’s decision to exit EABL by selling its entire shareholding to Asahi Group Holdings.
In a cautionary announcement issued on December 17, 2025, EABL confirmed that its board had been notified of the transaction a day earlier.
Diageo currently controls 65 per cent of EABL’s issued shares through its indirect subsidiary, Diageo Kenya Limited, and holds 53.68 per cent of UDV (Kenya) Limited. The deal will see Diageo dispose of all its interests in the Kenyan brewer and spirits business.
Also Read: Ex-Diageo Distributor Moves to Court to Block Sale of EABL Stake to Japanese Giant
The company said the transaction aligns with its strategy of divesting non-core assets and strengthening its balance sheet. It estimates net proceeds of approximately $2.3 billion, implying an enterprise value of $4.8 billion for EABL and reducing its leverage by about 0.25x.
Completion of the deal is subject to regulatory approvals in Kenya, Uganda, and Tanzania, with closing expected in the second half of 2026.
Following the announcement, EABL shares surged nearly 19 per cent, closing at Ksh299, on December 17, 2025, as investors reacted positively to the proposed acquisition.
Financial performance
Earlier this week, EABL reported its unaudited half-year results for the period ended December 31, 2025. Net profit rose 37.68 per cent to Ksh11.16 billion, driven by higher revenues, improved margins, disciplined cost control, and operational efficiencies across the group.
On the back of the strong performance, the board declared an interim dividend of Ksh4.00 per share, a 60 per cent increase year-on-year, translating to a total payout of Ksh4.35 billion for the half-year period.
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