New court appeal puts Sh300billion EABL sale in limbo
A fresh legal battle has emerged over the planned Sh300 billion sale of a majority stake in East African Breweries Limited (EABL), threatening to delay one of Kenya’s largest corporate transactions.
The dispute centres on British multinational Diageo’s proposed sale of its 65 per cent stake in EABL to Japan’s Asahi Group Holdings, a deal aimed at reducing debt and reviving growth.
Although the High Court last week dismissed an application by beer distributor Bia Tosha seeking to block the transaction, the firm has now filed a notice of appeal, introducing a fresh hurdle to the deal’s completion.
In its notice, Bia Tosha said it was dissatisfied with the ruling delivered by Justice Bahati Mwamuye and intends to challenge the entire decision at the Court of Appeal.
“Take notice that Bia Tosha Distributors Limited… intends to appeal,” the firm stated.
The distributor is seeking to stop the sale over a long-running dispute dating back to 2016, in which it accuses EABL and related entities of unfairly terminating its distribution rights.
The firm is pursuing damages of up to Sh25 billion linked to the termination of its contract.
Bia Tosha argues that allowing the transaction to proceed would complicate enforcement of any future court judgment, particularly if Diageo exits the Kenyan market.
It fears it may be forced to pursue legal action in foreign jurisdictions, raising the stakes in the dispute.
The distributor has also moved to include regulators such as the Capital Markets Authority and the Competition Authority of Kenya in the appeal, signalling a broader legal contest that could further delay regulatory approvals.
Diageo, however, has maintained that the share sale is unrelated to the underlying distributorship dispute and should not be blocked.
The company had earlier warned that halting the transaction would interfere with a major commercial deal of national significance.
The transaction, valued at about $2.3 billion (Sh300 billion), is part of Diageo’s global restructuring strategy and is expected to rank among the largest deals in Kenya’s corporate history.
With the appeal now filed, the future of the high-profile deal remains uncertain, as the Court of Appeal prepares to determine whether the sale can proceed or be halted pending resolution of the long-running legal dispute.
