Burugu’s bid to block Sh297billion Diageo’s stake in EABL sale crashes

The High Court has dealt a major blow to Kenyan businessman Peter Burugu Gachuru, owner of Bia Tosha Distributors Limited, after dismissing his application seeking to block British multinational Diageo from selling its controlling stake in East African Breweries Limited (EABL) to Japan’s Asahi Group Holdings in a deal valued at Sh297 billion ($2.3 billion).

In a ruling delivered by High Court judge Bahati Mwamuye, the court dismissed Bia Tosha’s January 5, 2026 application and lifted interim orders that had temporarily halted the finalisation of the transaction.

The decision clears the way for the completion of one of the largest corporate deals in Kenya’s history, which will see Asahi become the largest shareholder in EABL.

Bia Tosha had sought to block the deal, arguing that Diageo’s exit from the Kenyan market would complicate its ability to pursue a long-running legal dispute dating back to 2016.

The distributor is seeking Sh25 billion in damages over what it claims was the unlawful termination of its distribution rights by Kenya Breweries Limited and UDV (Kenya).

The company contended that once Diageo exits, it would be forced to pursue any claims in the United Kingdom, raising concerns about jurisdiction and enforcement of potential judgments.

However, EABL and Diageo opposed the application, warning that halting the transaction would disrupt a well-established supply chain supporting thousands of jobs across Kenya and the wider East African region.

They further argued that blocking the deal would undermine investor confidence and send a negative signal about Kenya’s business environment.

In his ruling, Justice Mwamuye found no sufficient grounds to stop the transaction, allowing the multinational restructuring to proceed.

He directed that the matter will be mentioned on April 15 for further directions on the hearing of the main case.

EABL welcomed the ruling, maintaining that it will defend itself in the ongoing dispute.

The brewer emphasised its significant contribution to the regional economy and warned that interference with legitimate commercial transactions could have far-reaching consequences.

The dispute traces back to a 2000 agreement granting Bia Tosha distribution rights across several regions in Kenya, in exchange for goodwill payments.

The relationship later deteriorated, culminating in litigation that has moved through multiple courts, including the Court of Appeal and the Supreme Court.

Diageo’s planned exit forms part of its broader global strategy under CEO Dave Lewis to reduce debt and revive growth amid shifting consumer preferences and market pressures.

Meanwhile, Asahi is pursuing expansion in emerging markets, viewing EABL as a strategic entry point into Africa.

The parties expect the transaction to be completed in the second half of the year.