A planned multibillion-dollar transaction involving beverage giant Diageo and Japan’s Asahi Holdings has encountered yet another legal setback in Kenya, as court actions continue to challenge the proposed sale of a controlling stake in East African Breweries Limited (EABL).
The deal, valued at approximately $2.3 billion, was announced in December and would see Diageo transfer its 65% ownership in EABL to Asahi.
However, ongoing litigation has delayed progress and raised uncertainty about the transaction’s timeline.
Brewer Seeks Judicial Intervention Over Growing Number of Cases
In response to the latest legal challenge, EABL has formally appealed to Kenya’s Chief Justice, Martha Koome, requesting faster handling of court proceedings linked to the transaction.
According to correspondence reviewed by Reuters, EABL’s legal team expressed concern over what it described as a growing number of overlapping lawsuits targeting the same deal.
The lawyers warned that multiple courts examining similar issues could lead to contradictory rulings and further complicate the process.
Minority Shareholder Secures Court Order
The newest challenge emerged last week when a minority shareholder obtained an order temporarily stopping the transaction from moving forward.
The lawsuit raises several concerns, including whether minority investors will receive fair treatment under the terms of the proposed sale.
It marks the fourth legal attempt to halt or disrupt the agreement since it was first announced.
Allegations of Forum Shopping Surface
EABL’s lawyers also accused opponents of engaging in what they termed “forum shopping,” a legal strategy where litigants seek out courts they believe may be more favorable to their case.
The company specifically pointed to proceedings initiated at the High Court in Machakos, arguing that the action appeared designed to obtain relief after a similar request had previously failed before the High Court in Nairobi.
According to the letter, this pattern increases the risk of inconsistent judicial outcomes and places unnecessary pressure on the legal system.
Cross-Border Transaction Faces Time Constraints
The brewing company emphasized that the proposed acquisition is governed by a strict schedule involving contractual obligations and regulatory approvals across multiple jurisdictions.
Any prolonged delay, EABL argued, could affect the carefully coordinated timeline required to complete the transaction, which the parties involved still expect to finalize during the second half of the year.
Despite the legal hurdles, Diageo has maintained confidence in the deal’s prospects.
Diageo and EABL Defend the Sale
In a statement, Diageo said it remains convinced of the transaction’s value and legality, adding that it will continue to defend its position while respecting the judicial process.
EABL echoed that sentiment, arguing that the acquisition would generate benefits for Kenya’s economy. The company criticized what it described as repeated and coordinated legal efforts intended to derail the agreement for private commercial interests rather than public benefit.
Previous Challenges Produced Mixed Results
The latest lawsuit is not the first obstacle facing the transaction.
Three earlier cases have already been filed against the proposed sale.
Two of those challenges were dismissed by the courts, while the status of the third remains uncertain.
With another court battle now underway, the future of one of East Africa’s largest corporate transactions remains tied to the outcome of Kenya’s judicial process.
