A new legal development has emerged in the proposed sale of Diageo’s stake in East African Breweries Limited (EABL), after Bia Tosha Distributors filed a notice of appeal challenging a recent High Court decision that allowed the transaction to proceed.
On April 9, 2026, High Court Judge Bahati Mwamuye dismissed Bia Tosha’s application, lifting orders that had previously restricted progress on the deal. The ruling cleared the way for Diageo’s planned sale of its stake in EABL to Asahi Group Holdings, a transaction valued at approximately $2.3 billion.
Following the decision, Bia Tosha moved to the Court of Appeal, formally challenging the High Court’s findings. In its appeal, the distributor has also included the Capital Markets Authority (CMA) and the Competition Authority of Kenya (CAK) as parties to the case, introducing regulatory bodies into the ongoing dispute.
The origins of the case date back several years. Bia Tosha’s claims are linked to a distribution agreement under which Kenya Breweries Limited granted the company rights to distribute products across parts of Nairobi and Kajiado territories that were expanded to 22 routes by 2006. According to the distributor, some of these territories were later reassigned, and a request for compensation related to a Sh38 million goodwill refund was not granted.
In its court filings, Bia Tosha argued that the completion of the transaction could affect its ability to pursue claims, stating that it risks seeking damages of up to Sh25 billion in the United Kingdom if Diageo exits the Kenyan market. The distributor maintained that a transfer of ownership could place the company outside the jurisdiction of local courts.
The High Court, however, found that the issues raised were contractual in nature and could be addressed independently of the ownership transaction. In its ruling, the court stated that such disputes do not necessarily justify halting a separate commercial deal.
Following the judgment, EABL said: “This decision allows the transaction to proceed to completion through standard regulatory channels.”
The proposed transaction also includes the transfer of Diageo’s 53.68 percent shareholding in UDV Kenya Limited, consolidating beer and spirits operations under Asahi if completed. The deal remains subject to regulatory approvals in Kenya, Uganda, and Tanzania, with completion expected in the second half of 2026.
The appeal introduces a new phase in the legal process, with the underlying dispute scheduled for mention on April 15, 2026 for further directions separately from the appeal, which will follow its own Court of Appeal timetable. The outcome will determine whether the transaction proceeds without further legal interruption or faces additional review.
The sale forms part of Diageo’s broader corporate strategy to reduce debt and divest non core assets, while for Asahi, it represents an expansion into Africa’s fast-growing consumer market. As the appellate process begins, the transaction continues to move through both legal and regulatory channels.
