Kenya’s High Court has paused the sale of Diageo’s stake in East African Breweries (EABL) to Japan’s Asahi Group Holdings, freezing the ownership structure until two regulatory processes conclude.
Justice Francis Gikonyo ordered that EABL’s ownership and control remain as they stood on June 18, 2026. The order holds until the Capital Markets Tribunal rules on a pending appeal and the Competition Authority of Kenya (CAK) finishes its review of the transaction.
The ruling extends a legal dispute Khusoko has followed since Diageo and Asahi announced the deal. Courts have fielded challenges from a distributor, a contractor, and now a shareholder raising constitutional questions.
The Petition Behind the Pause
Shareholder Christine Irungu filed the petition. It raises questions about disclosure to investors, protection of minority shareholders, and the conduct of market regulators.
Timing sits at the center of her argument. Between 2022 and 2023, Diageo ran a tender offer that raised its stake in EABL from about 50 percent to roughly 65 percent. It agreed to sell that stake to Asahi only after the offer closed. Irungu is asking whether the purchase was designed to increase Diageo’s position ahead of the sale, and whether shareholders had enough information to understand what was happening.
Her petition also raises constitutional issues. As she stated in her filing, the case touches on “violation of specified constitutional provisions, rights and guarantees as well as exercise of mandates by statutory authorities concerned.”
How the Deal Reached This Point
Irungu’s petition is not the first attempt to halt the transaction. Diageo agreed in December 2025 to sell its stake to Asahi as part of a plan to cut debt and offload assets outside its core business.
Bia Tosha, a beer distributor with a separate dispute against Diageo dating to 2016, mounted the first challenge. It wanted the sale frozen until that case was resolved. A High Court judge disagreed. The court dismissed Bia Tosha’s application in April, ruling that the transaction could proceed.
That ruling did not end the litigation. A construction firm and other litigants filed further challenges, and by June, Irungu’s petition had produced orders freezing the ownership structure. EABL continued its operations through the process, including a change at the top of its finance function that Khusoko covered as part of its reporting on the company.
Why Diageo, EABL and Asahi Pushed Back
Diageo, EABL and Asahi asked the court to stay out of the matter. They argued that Kenya’s capital markets and competition laws already assign these questions to specialized regulators and tribunals, so the case belongs there.
They also pointed to consequences beyond the deal itself: freezing the transaction, they said, could affect investor confidence and Kenya’s standing as a destination for capital. CAK made a related argument, telling the court to wait until the existing regulatory appeal channels are exhausted before intervening.
Why the Court Intervened Anyway
Justice Gikonyo rejected those arguments. He found that the dispute spans several institutions and raises constitutional questions that no single regulator can resolve alone.
Two processes remain open. CAK has not finished its review, so there is no decision yet for anyone to appeal to the Competition Tribunal. At the same time, the Capital Markets Tribunal is hearing a separate appeal from EABL minority shareholders, who are contesting the Capital Markets Authority’s decision to exempt Asahi from making a mandatory takeover offer.
Letting the sale proceed while both matters remain unresolved could undercut either outcome, the judge said. As he put it, “An order of status quo will allow the appeal to be concluded as well as Competition Authority to determine the matters before it.”
Key Facts at a Glance
| Detail | Information |
|---|---|
| Petitioner | Christine Irungu, EABL shareholder |
| Presiding judge | Justice Francis Gikonyo, High Court |
| Ownership freeze date | June 18, 2026 |
| Diageo’s original EABL stake | About 50 percent |
| Stake after 2022 to 2023 tender offer | About 65 percent |
| Buyer | Asahi Group Holdings (Japan) |
| Earlier challenge, dismissed April 2026 | Bia Tosha Distributors |
| Bodies still reviewing the deal | Competition Authority of Kenya; Capital Markets Tribunal |
What Happens Next
EABL’s ownership stays frozen for now. The deal cannot proceed until the Capital Markets Tribunal rules on the minority shareholders’ appeal and CAK completes its review. Both outcomes will determine whether, and on what terms, Asahi takes control of EABL.
For more on how this transaction has unfolded, see Khusoko’s coverage of the Bia Tosha ruling that initially cleared the deal and EABL’s leadership changes during the sale process.
