Court postpones case seeking to halt Diageo's Ksh.296 billion sale of EABL
Beer bottles pass through a conveyor belt along a production line at the East African Breweries' microbrewery as the company released its half-year results in Ruaraka, Nairobi, Kenya, January 26, 2024. REUTERS/Monicah Mwangi//File Photo
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Kenya's High Court on Friday moved to January 20 the hearing
of a case seeking to stop Diageo's $2.3 billion (Ksh.296.585 billion) sale of
its local subsidiary EABL to Japan's Asahi Holdings (2502.T).
Diageo said last month it had agreed to sell its 65%
stake in East African Breweries Limited (EABL) to the Japanese brewer.
Diageo is selling non-core assets to reduce debt, as well as offset the impact
of U.S. tariffs and a fall in sales driven by shifting consumer patterns.
Kenyan beer distributor Bia Tosha filed the case to try to
block the deal this week over pending litigation dating back to 2016, sending
Diageo's shares lower. EABL has said the case has no legal or factual link to
the transaction.
Bahati Mwamuye, a judge at the court, said the deal parties
could take preliminary steps such as seeking regulatory approvals, as long as
the transaction was not finalised by January 20, when the court will give
further directions.
Deal parties have said they expect completion in the second
half of this year.
"We welcome the court's decision to allow the
regulatory phases of this transaction to continue," EABL said in a
statement.
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