East African Breweries Limited (EABL) can now proceed with statutory regulatory approval processes for the proposed sale of Diageo’s controlling stake to Japan’s Asahi Group, after the High Court of Kenya ruled that regulatory steps should continue even as a parallel legal challenge is fast tracked. The decision was issued on January 12 2026, in response to a long running dispute brought by Bia Tosha Distributors Limited.
The deal, first announced on December 17 2025, involves British spirits maker Diageo selling its 65 percent shareholding in EABL and its interest in spirits company UDV (Kenya) Limited to Asahi in a transaction valued at about 2.3 billion dollars. The sale is subject to approval by regulators in Kenya, Uganda and Tanzania before expected completion in the second half of 2026.
A legal challenge was filed by Bia Tosha Distributors, a Kenyan beer distribution company, seeking to block the transaction on the basis that its own long running lawsuit over distribution rights and alleged unfair competition with EABL should take precedence over the sale. The case, which stems from a dispute dating back several years, was certified as urgent. Bia Tosha argued that if the sale of Diageo’s stake goes ahead before its claims are resolved, it could be unable to enforce any judgment against Diageo.
In a ruling on January 12 2026, the High Court clarified that preparatory and regulatory processes related to the deal, including applications for competition and capital markets clearances, could proceed without interruption, even as the court fast tracks the Bia Tosha matter for a hearing due later in February 2026. The court also extended interim conservatory orders until February 26 2026, specifying that the orders apply only to the final stages of the transaction and not to regulatory engagement.
“The High Court has ordered an expedited hearing of a legal challenge touching on Diageo’s planned sale of its shares in East African Breweries PLC to Japan’s Asahi Group while allowing regulatory processes linked to the transaction to proceed without interruption,” EABL said in a public update.
By allowing the regulatory track to continue, the court has enabled EABL, Diageo and Asahi to engage with statutory bodies such as the Competition Authority of Kenya and the Capital Markets Authority. These approvals are necessary steps before any transfer of shares or change in control can be effected, and they involve detailed scrutiny of competition effects and capital markets compliance.
EABL welcomed the ruling, noting that the distribution dispute with Bia Tosha is unrelated to the share sale and that regulatory processes are essential for maintaining deal timelines. “We welcome the court’s decision to allow the regulatory phases of this transaction to continue,” the company said.
The ruling means that while the hearing on the Bia Tosha case will be expedited, regulatory scrutiny necessary to determine competition, shareholder protections and market effects can proceed.
As EABL moves forward with filings and engagements with regulators, stakeholders are watching how the legal and statutory tracks unfold, with the outcome likely to influence the pace of one of the largest beverage sector transactions in East African history.
READ MORE
Diageo plans to sell majority EABL stake to Asahi in Sh297 billion deal
