A Kenyan court ruling on April 9, 2026 has allowed the proposed sale of Diageo’s stake in East African Breweries Limited (EABL) to Asahi Group Holdings to proceed, following the dismissal of a legal application that had sought to block the transaction.
The High Court rejected a petition filed by Bia Tosha Distributors, which had challenged the deal and requested orders to prevent its completion. In its ruling, the court dismissed the application and lifted any remaining restrictions that could delay the transaction.
Justice Bahati Mwamuye stated: “The petitioner’s notice of motion dated January 5, 2026 is hereby dismissed,” effectively clearing the way for the deal to move forward through regulatory processes.
The transaction was first announced on December 17, 2025, when Diageo disclosed plans to sell its entire shareholding in Diageo Kenya Limited, which holds a controlling stake in EABL, to Asahi. The deal values EABL at approximately $4.8 billion, with Diageo’s stake estimated at about $2.3 billion.
As part of the agreement, key regional brands such as Tusker and Kenya Cane will remain under EABL ownership. Diageo has also indicated it will enter into long term licensing agreements to ensure continued production and distribution of brands including Guinness and other international spirits within the region.
The legal challenge to the transaction was filed by Bia Tosha Distributors under a certificate of urgency January 7, 2026, citing a long standing dispute related to the termination of distribution agreements in 2016. The petitioner argued that proceeding with the transaction could complicate enforcement of any future court decisions related to that dispute. On January 9, 2026, the court issued a temporary preservation order restraining only the final steps of the sale, while allowing regulatory approvals and other preliminary steps to continue uninterrupted. That order remained in effect until January 20, 2026, when a further interim conservatory order was issued. That conservatory order lapsed on February 26, 2026, prompting Bia Tosha to seek its extension. The court declined to issue new orders and scheduled its final ruling for April 9, 2026.
Diageo opposed the extension, maintaining that the transaction was being executed at the shareholder level and did not involve the transfer of operating assets belonging to EABL or its subsidiaries. The court later delivered its ruling on April 9, 2026, when it dismissed the application.
Following the ruling, EABL said in a statement: “This decision allows the transaction to proceed to completion through standard regulatory channels.”
The proposed sale forms part of Diageo’s broader corporate strategy to streamline its operations and optimize capital allocation. The company has undertaken similar divestments in other African markets in recent years, while retaining licensing rights for its global brands.
For Asahi, the acquisition represents a significant expansion into the African market. The company’s CEO, Atsushi Katsuki, previously described EABL as offering an attractive portfolio of brands, marketing capabilities and production facilities that aligns with its international growth plans.
EABL reported net sales of approximately $996 million for the financial year ended June 30, 2025, with earnings before interest, taxes, depreciation and amortization (EBITDA) of $258 million and net income of $94 million, reflecting its position as a major player in the regional beverage market.
The transaction remains subject to regulatory approvals across the markets in which EABL operates, including Kenya, Uganda and Tanzania. Once completed, Asahi will assume control of the company’s operations in these countries, while EABL is expected to remain listed on regional stock exchanges.
The underlying legal dispute involving Bia Tosha Distributors continues separately and has not yet been resolved. However, the recent court decision removes a key obstacle that had delayed progress on the transaction. Completion of the deal is anticipated in the second half of 2026, pending the necessary approvals.
