A high-stakes deal that would see Britain’s Diageo sell its controlling stake in East African Breweries Limited to Japan’s Asahi Group Holdings remains stuck in legal and regulatory review, even as Kenya’s competition watchdog presses ahead with its assessment of the transaction.
The proposed sale, reported to be worth in the region of $2.3 billion, would transfer Diageo’s roughly 65 per cent holding in the region’s largest brewer to Asahi, a shift that would hand control of some of East Africa’s best-known beer and spirits brands to a new foreign owner. The transaction has, however, been tied up in litigation after a minority shareholder challenged the sale in court, arguing that the process failed to adequately protect minority shareholder interests and did not meet constitutional standards on transparency in a deal of this scale.
The High Court has allowed the Competition Authority of Kenya to continue its review of the acquisition and reach its own determination under the Competition Act, even as a separate appeal at the Capital Markets Tribunal proceeds in parallel. Crucially, the court has maintained what is known as a status quo order, meaning the transaction cannot be completed and EABL’s ownership structure cannot change until the legal disputes are resolved.
For EABL, which brews and distributes some of the region’s most recognisable beer and spirits brands, the prolonged uncertainty has stirred debate among industry players, consumers and shareholders about what a change of ownership would mean for pricing, local investment and market competition. Rival brewers and beverage companies are said to be watching the regulatory process closely, given the scale of EABL’s dominance in the Kenyan market and the precedent any conditions imposed by the competition authority could set for future foreign acquisitions in the sector.
The Competition Authority is expected to weigh in formally on the merits of the deal once the parallel court and tribunal processes conclude, though a timeline for that remains unclear. Until then, both Diageo and Asahi are left waiting on Kenyan courts and regulators to clear the path for a transaction that was originally expected to have closed months ago.