Japan’s Asahi Group Holdings is set to take control of East African Breweries Plc after Kenya’s competition regulator approved Diageo’s sale of its 65 percent stake in the brewer, a transaction valued at roughly $2.3 billion, or about Sh298 billion. The Competition Authority of Kenya’s (CAK) sign off clears what had been described as the last regulatory hurdle for a deal that had also been delayed by ongoing court cases.
The agreement was first struck in December 2025, when Diageo announced it would sell its controlling stake in EABL to Asahi as part of a broader strategy to exit the African market, a move also expected to help the London listed drinks giant pay down debt. Alongside the EABL stake, Asahi also agreed to acquire Diageo’s roughly 53.68 percent holding in spirits distributor UDV Kenya for about $646 million (Sh83.6 billion), pushing the combined size of the transaction to around Sh388.2 billion.
While the UDV Kenya portion of the deal was waved through without conditions, CAK took a more cautious approach to the EABL side of the transaction. The authority said it had assessed the impact of the deal on competition in the production, distribution and retail of beer and cider, as well as the production and supply of malt and brewing grains, and also weighed the potential knock on effects for small businesses, employment and investment in Kenya.
The headline condition centres on retail fridge space. Under the terms of the approval, at least 20 percent of the refrigeration space that the merged entity provides to retail outlets must be set aside for beer and cider products that are not branded by EABL or Asahi. That marks a significant shift in market practice, since EABL currently bars rival brands from being stored in the fridges it supplies to retailers. The fridge sharing rule is not universal though, since it does not apply to top end drinking establishments, supermarkets, or liquor stores, meaning its practical effect will be felt most in the smaller neighbourhood outlets where EABL branded coolers are common.
CAK also moved to protect creditors and other parties with claims against the company. The regulator has required that sufficient funds from the transaction proceeds be set aside to cover any outstanding liabilities EABL may face. That instruction followed earlier reporting that the authority had proposed EABL reserve as much as Sh15 billion ahead of granting its approval, an amount later cited elsewhere as roughly Sh15.5 billion tied to potential third party claims arising after the deal closes.
EABL confirmed the development in a brief statement, noting the regulator’s decision on the transaction between Diageo and Asahi. Diageo issued a similarly measured acknowledgement of the approval to trade publication Just Drinks.
The deal faced a legal challenge from distributor Bia Tosha Distributors Limited, which sought to block the sale, but the High Court dismissed the application in April and lifted an interim order that had paused the transaction. Bia Tosha had argued that Diageo’s exit could undermine its position in a separate commercial dispute involving EABL. A later case brought by a minority shareholder led courts to temporarily preserve EABL’s existing control structure while reviews continued, and EABL subsequently petitioned Chief Justice Martha Koome to help fast track the related court proceedings.
Kenya’s approval follows sign off in other East African markets. The deal has already secured all necessary approvals in Uganda and Tanzania, leaving Kenya as the final major regulatory checkpoint.
For consumers, the ownership change is not expected to immediately alter what’s on shelves. Diageo’s international brands, including Guinness, Smirnoff and Captain Morgan, will continue to be produced or distributed under licence, while local labels such as Tusker and Kenya Cane are expected to stay within EABL’s portfolio.
The business Asahi is acquiring is currently performing well. EABL reported a 49 percent jump in net profit to KES18.2 billion (about $140.7 million) for its 2026 financial year, driven by sales growth, tighter cost management and lower financing costs.
Whether the takeover translates into further gains for the Kenyan market, however, is not guaranteed. Any broader benefits will hinge on the investment decisions Asahi makes once the acquisition is finalised, rather than following automatically from the change in ownership.
With CAK’s approval secured, attention now turns to how quickly Diageo and Asahi can move to close the transaction, and how retailers and rival brewers adjust to a beer aisle where EABL’s fridges are, for the first time, required to make room for the competition.
