Bia Tosha Signals Appeal After Court Clears Ksh300 Billion Diageo–Asahi EABL Deal

A fresh legal showdown may be brewing over the proposed Ksh300 billion sale of Diageo’s controlling stake in East African Breweries Limited (EABL), after Bia Tosha Distributors Limited signalled plans to appeal a High Court decision that cleared the transaction.

Businessman Peter Burugu, owner of Bia Tosha Distributors, had sought to block the deal pending the determination of a long-running commercial dispute involving Diageo, EABL and Kenya Breweries Limited (KBL).

However, the High Court dismissed the application and lifted interim orders that had temporarily halted completion of the transaction.

“The application is dismissed, and any interim orders issued earlier are hereby discharged,” the court ruled, effectively paving the way for Japan’s Asahi Group Holdings to proceed with the acquisition.

The case stems from a dispute dating back to 2016, when Diageo declined to renew Bia Tosha’s beer distribution contract. The distributor is seeking Ksh25 billion in damages, arguing that Diageo’s planned exit from the Kenyan market could complicate enforcement of any judgment in its favour.

Bia Tosha had argued that if Diageo completes the sale and exits the local jurisdiction, it may be forced to pursue compensation claims abroad, potentially in the United Kingdom, making the process significantly more complex and costly.

Early this year, Burugu moved to court seeking to stop the transaction until the underlying case is heard and determined. However, EABL maintained that the distributor’s claims had no legal or factual connection to the proposed share sale.

“Regardless of the change of majority shareholder, EABL and KBL remain independent, capable entities fully able to conduct their business and defend any litigation,” the brewer said in court filings.

Despite the setback, attention has now shifted to Bia Tosha’s next legal move, with indications that it has either filed, or is preparing to file, a notice of appeal. An appeal could inject fresh uncertainty into one of Kenya’s biggest recent corporate transactions.

Under the deal, Asahi will acquire Diageo’s 65 percent stake in EABL through its investment vehicle, alongside a 53.68 percent shareholding in UDV Kenya. The acquisition would make the Japanese brewer the largest shareholder in EABL, marking a significant ownership shift in East Africa’s alcohol market.

EABL and KBL opposed attempts to block the deal, warning that any further delays could destabilise a regional supply chain that supports thousands of jobs.

“Kenya’s attractiveness as an investment destination depends in part on the security and predictability of property rights and the ability of companies to engage in legitimate commercial transactions without unwarranted judicial interference,” KBL submitted.

The companies also warned that halting the deal would affect distributors, retailers, farmers and other players who depend on stable production and logistics systems.

The matter is scheduled for mention on April 15 for directions on the hearing of the main case, even as a possible appeal process unfolds in parallel.