East African Breweries Plc (EABL) has escalated the legal fight over Diageo’s planned exit from the brewer, asking Chief Justice Martha Koome to step in over what it says is a growing web of parallel court cases threatening one of the region’s biggest corporate transactions. In a letter dated June 23, EABL warned that multiple suits filed in different High Court stations risk producing conflicting rulings on the proposed sale of Diageo’s 65 percent stake in EABL and its holding in UDV Kenya to Japan’s Asahi Group Holdings in a deal valued at about $2.3 billion, or roughly Sh340 billion.
EABL, through law firm Iseme, Kamau & Maema Advocates, told the Chief Justice that the fragmented handling of the matter could create uncertainty around the transaction, undermine investor confidence and dent Kenya’s reputation for judicial and regulatory predictability. The brewer argued that the repeated filing of similar cases in different courts amounted to forum shopping and exposed the deal to contradictory orders from courts of equal jurisdiction.
At the centre of the dispute is Diageo’s plan to transfer its controlling EABL stake through Diageo Kenya Limited to Asahi, alongside its 53.68 percent stake in UDV Kenya. EABL says several attempts to block the transaction have already failed in Nairobi. The company pointed to an April 9 ruling in the Bia Tosha Distributors case, where the High Court declined to stop the transaction, and to another ruling on June 17 in which the court rejected an application by JILK Construction Company and others seeking conservatory orders against the sale. EABL also says a Nairobi court on June 22 declined to grant interim orders in a separate application, holding that public interest favoured allowing the transaction to proceed.
The company’s concern sharpened after a fresh petition filed in Machakos led to conservatory orders freezing the deal. On June 18, the Machakos High Court issued interim orders restraining Diageo, EABL, Asahi and other parties from completing or giving effect to the sale pending further directions. That order landed on the same day another Nairobi court had declined to stop the transaction, setting up exactly the kind of conflicting judicial outcomes EABL now wants the Chief Justice to address administratively.
EABL says it is not challenging the Machakos court’s jurisdiction or the merits of that petition, but it wants the courts to avoid parallel proceedings over the same transaction. The brewer argues that uncertainty around the sale has consequences beyond the companies involved, given the size of the deal and its wider economic implications. The transaction is expected to generate roughly Sh42 billion in capital gains tax for the Kenya Revenue Authority, making it one of the biggest tax-yielding corporate deals in recent years. EABL also warned that delays could affect shareholders, distributors, suppliers, employees and the broader investment climate.
The latest court wrangles add a new layer of risk to a deal that has already attracted heavy scrutiny because of its size and strategic importance. For Diageo, the transaction is part of a broader move to exit direct ownership of EABL under its asset-light strategy in Africa. For Asahi, it is a major bet on East Africa’s largest listed brewer and one of the most recognised consumer businesses in the region. What EABL is now signalling is that the biggest threat to completion may no longer be commercial or regulatory approval, but whether Kenya’s courts can avoid issuing overlapping orders on the same Sh340 billion transaction.
