The Kenyan High Court has dismissed an application by JILK Construction seeking to halt the proposed acquisition of shares in the regional market leader East African Breweries (EABL) by Japan-based Asahi from multinational drinks company Diageo. The decision removes another potential legal obstacle to the USD 2.3 billion transaction, which was first announced in December 2025 (inside.beer, 18.12.2025).
In a ruling delivered on Tuesday, Justice Gregory Mutai declined to grant conservatory orders that would have stopped, restrained, or preserved the share transaction pending the determination of a petition filed by the contractor. JILK Construction has been involved in a long-running dispute with EABL subsidiary Kenya Breweries since 2019 over claims for payment for construction work at the Kisumu Brewery. The company had argued that the transaction should not proceed due to these concerns.
However, the judge found that JILK Construction had failed to establish sufficient grounds to justify halting the deal. Justice Mutai noted that the petitioners neither claimed ownership of the shares being sold nor sought payment from the proceeds of the transaction. He further observed that the issues raised by JILK largely stemmed from historical disputes that are already the subject of arbitration and commercial proceedings.
The court held that the reliefs sought in the petition were largely declaratory in nature and could still be determined even if the share sale proceeds. In dismissing the application, the judge noted that EABL and Kenya Breweries would continue to exist after the transaction, and Diageo had not been shown to be exiting the jurisdiction in a manner that would make it unreachable. Furthermore, if Asahi becomes the majority shareholder, it will remain subject to Kenyan regulatory oversight and court processes. The judge also ruled that public interest favours the completion of the transaction because of its significant impact on public finance and investment.
The transaction involves Asahi acquiring 100 percent of Diageo Kenya, which indirectly controls approximately 65 percent of EABL. The deal is expected to be completed in the second half of this year, but it is still pending approval by the Competition Authority of Kenya and faces other legal and regulatory challenges. Recently, Heineken raised concerns about the deal's impact on market competition in East Africa (inside.beer, 29.04.2026), while minority shareholders have also opposed the transaction structure (inside.beer, 02.04.2026).
Despite these hurdles, Asahi recently cleared a major regulatory step when East African regulators waived mandatory takeover offer requirements for minority shareholders (inside.beer, 15.05.2026). The successful completion of the sale is part of Diageo's strategy to ease its debts and revive growth by disposing of non-core assets while retaining brand presence via licensing agreements for international brands like Guinness, Johnnie Walker, and Captain Morgan.
