High Court Halts Ksh340B EABL Sale Pending Legal Review

The proposed takeover of East African Breweries PLC (EABL) by Japan’s Asahi Group Holdings has suffered another setback after the High Court ordered that the brewer’s current ownership structure be preserved until pending regulatory and legal matters are resolved.

The court ruled that Diageo cannot complete the transfer of its controlling stake in EABL to Asahi while an appeal before the Capital Markets Tribunal remains pending and the Competition Authority of Kenya (CAK) continues its review of the transaction.

Justice Francis Gikonyo said maintaining the current position would give the relevant institutions time to complete the processes before them without the ownership of EABL changing in the meantime.

The decision follows a petition filed by EABL shareholder Christine Irungu, who has raised concerns about the proposed sale, disclosure of information and the protection of minority shareholders.

A major issue in the case is Diageo’s decision to increase its stake in EABL from about 50 per cent to approximately 65 per cent through a tender offer conducted between 2022 and 2023.

Diageo subsequently agreed to sell its controlling stake to Asahi as part of a wider transaction involving its East African beverage businesses. The proposed deal, announced in December 2025, is estimated to be worth about Sh340 billion.

Irungu has questioned whether the increase in Diageo’s ownership was properly disclosed and whether minority shareholders received adequate information about the transactions affecting the company.

She has also raised questions about the actions of the capital markets and competition regulators in approving and reviewing different aspects of the deal.

The dispute has already reached the Capital Markets Tribunal, where EABL minority shareholders are challenging the Capital Markets Authority’s decision to exempt Asahi from making a mandatory takeover offer for shares held by other investors.

Such an offer would ordinarily allow other shareholders to sell their shares when control of a listed company changes, making the exemption an important issue for minority investors.

At the same time, CAK is assessing the proposed acquisition under Kenya’s competition laws. The authority had argued that the High Court should not take up the dispute before the available regulatory and appeal mechanisms had been exhausted.

Diageo, EABL and Asahi opposed the application, arguing that the matters raised should primarily be handled by the specialised regulators and tribunals established under Kenya’s capital markets and competition laws.

The companies also warned that efforts to delay or stop the transaction could affect investor confidence and Kenya’s reputation as a destination for major international investments.

The High Court, however, found that the case involves several institutions and raises wider constitutional questions that could not be dealt with fully through a single regulatory process.

The court also noted that CAK had not yet made a final decision on the transaction. This means there is currently no completed regulatory decision that could be taken before the Competition Tribunal for review.

The latest order does not cancel the proposed sale or prevent CAK from continuing its assessment. It also does not determine whether Asahi will ultimately take control of EABL.

Instead, it requires the parties to maintain the ownership and control structure that existed on June 18, 2026 until the pending legal and regulatory processes are concluded.

The ruling could therefore delay the completion of one of the biggest transactions involving a Kenyan-listed company, as shareholders, regulators and the companies involved await the outcome of the outstanding proceedings.