The High Court has dismissed an application seeking to block Diageo’s planned sale of its majority stake in East African Breweries Limited (EABL), clearing the way for the Ksh 297 billion ($2.3 billion) transaction to Japan’s Asahi Group Holdings.
“The petitioner’s notice of motion dated 5th January 2026 is hereby dismissed,” ruled Bahati Mwamuye, a High Court judge.
Bia Tosha, a major beer distributor for EABL, had asked Kenya’s High Court to halt the sale, citing unresolved legal disputes with Diageo’s Kenyan operations.
Bia Tosha Lawyer, Kenneth Kipligat, told the news agency that if Diageo goes ahead with the sale of its only asset in Kenya, the firm would be unable to enforce a judgment against the company.
Court Lifts Injunction on EABL Transaction
In its April 9 ruling, the High Court lifted interim orders that had frozen the proposed sale, thereby allowing the transaction to proceed.
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The orders had been issued after the distributor argued that the transfer of ownership would adversely affect its contractual rights and business operations.
The court, however, determined that the threshold required to sustain the injunction had not been met.
It held that the transaction between Diageo and Asahi could proceed, noting that halting the deal would have greater commercial implications.
The transaction, valued at KSh300 billion, involves Diageo’s exit from EABL, one of the largest listed companies in the region and a dominant player in the East African beverage market.
Bia Tosha Application Dismissed
The case had been brought by Bia Tosha Distributors Limited, which sought to stop the sale, stating that it would interfere with its distribution rights.
Bia Tosha argued that its agreements with EABL could be undermined by a change in ownership.
In dismissing the application, the court found that the issues raised were contractual in nature and could be addressed through separate legal proceedings without affecting the ownership transaction.
The judge emphasized that the existence of a commercial dispute between private parties does not automatically justify the suspension of a major corporate deal.
The court further noted that appropriate legal remedies remain available to the distributor should it succeed in its claims at a later stage.
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Sale to Proceed as Case Continues Separately
With the orders lifted, Diageo is now free to proceed with the sale of its 65% stake in EABL to Asahi, marking a significant ownership transition for one of East Africa’s largest listed companies.
The transaction remains subject to standard regulatory approvals and completion processes, but the court’s decision effectively restores the deal timeline after months of legal uncertainty.
Meanwhile, the underlying dispute between EABL and Bia Tosha Distributors will continue before the courts.
The case is expected to focus on the interpretation and enforcement of distribution agreements that have been in contention for nearly a decade.
The High Court’s ruling separates the progression of the Ksh.297 billion transaction from the ongoing legal proceedings, allowing both matters to proceed concurrently within their respective legal frameworks.
