A Kenyan beer distribution firm has filed a case at Kenya's High Court seeking to block Diageo's $2.3bn sale of its local subsidiary EABL to Japan's Asahi Holdings over pending litigation, a lawyer for the challenger said on Wednesday, 7 January.
Beer bottles pass through a conveyor belt along a production line at the East African Breweries' microbrewery as the company released its half-year results in Ruaraka, Nairobi, Kenya, 26 January 2024. Reuters/Monicah Mwangi//File Photo
Shares in Diageo, which is the maker of Johnnie Walker whisky and Captain Morgan rum, lost more than 2% on news of the case, while EABL was 0.5% lower.
Diageo, the world's biggest spirits group, said last month it had agreed a deal with the Japanese brewer for a sale of its 65% stake in East African Breweries Limited, as it looks to sell assets and reduce debt to offset the impact of US tariffs, sales declines and shifting consumer patterns.
It has also been reducing its asset holdings in Africa.
Distribution firm Bia Tosha challenges the deal
The deal faces a challenge by Kenyan distributor Bia Tosha, which has asked the court to stop it until its litigation against Diageo, EABL and its Kenyan subsidiary KBL, over a competition dispute, is determined and settled.
Duncan Miriri and Emma Rumney 22 Dec 2025 Kenya's High Court has certified the case as urgent and has set a hearing date for Friday, when it will give directions, Kenneth Kiplagat, Bia Tosha's lawyer, told Reuters.
London-listed Diageo did not provide a comment. EABL, which is listed on the Nairobi bourse, said the case brought by Bia Tosha has no factual or legal links to the transaction.
"Regardless of the change of majority shareholder, EABL and KBL remain independent, capable entities fully able to conduct their business and defend any litigation," it said in a statement.
Once completed, the sale of EABL to Asahi, which values the company at $4.8bn, would mean Diageo no longer has any direct stake in the African beer business. Diageo inherited African beer operations when it was formed via the merger of Grand Metropolitan and Guinness in 1997.
