Kenyan Court Case Threatens to Block $2.3 Billion EABL Sale to Asahi Holdings

Nairobi. A Kenyan beer distribution firm has filed a case at Kenya’s High Court seeking to block the $2.3 billion sale of East African Breweries Limited (EABL) to Japan’s Asahi Holdings, over pending litigation.

Shares in the seller lost more than 2 percent on news of the case, while EABL was 0.5 percent lower.

The world’s biggest spirits group announced last month it had agreed a deal with the Japanese brewer for a sale of its 65 percent stake in East African Breweries Limited, as it looks to sell assets and reduce debt to offset the impact of U.S. tariffs, sales declines and shifting consumer patterns.

The company has also been reducing its asset holdings in Africa.

Distribution Firm Bia Tosha Challenges the Deal

The deal faces a challenge by Kenyan distributor Bia Tosha, which has asked the court to stop it until its litigation against EABL and its Kenyan subsidiary KBL, over a competition dispute, is determined and settled.

Kenya’s High Court has certified the case as urgent and has set a hearing date for Friday, when it will give directions, according to Kenneth Kiplagat, Bia Tosha’s lawyer.

EABL, which is listed on the Nairobi bourse, said the case brought by Bia Tosha has no factual or legal links to the transaction.

"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 company said in a statement.

Once completed, the sale of EABL to Asahi, which values the company at $4.8 billion, would mean the seller no longer has any direct stake in the African beer business.