Kenya seeks $115 million reserve fund in Diageo’s EABL sale

Kenya’s competition regulator is seeking a reserve fund of as much as Ksh15 billion ($115 million) from East African Breweries Ltd. before approving Diageo Plc’s sale of its controlling stake to Japan’s Asahi Group Holdings, adding another hurdle to one of Africa’s biggest beverage transactions.

The Competition Authority of Kenya wants the money set aside to cover potential liabilities and third-party claims linked to EABL. The demand has delayed completion of the transaction, which Diageo and Asahi agreed to in December 2025.

Diageo has rejected the proposed condition, saying there is no legal basis for it and that the concerns raised by the regulator are unrelated to the transaction. A Diageo spokesperson said the company and Asahi continue to discuss the issue with the CAK.

Court cases add to EABL deal delays

The EABL sale has also faced legal challenges in Kenya. A case brought by beer distributor Bia Tosha was dismissed in April, while a separate dispute involving a minority shareholder resulted in a temporary order blocking the transaction.

Diageo agreed to sell its 65% stake in EABL to Asahi for about $2.3 billion. The transaction implies an enterprise value of about $4.8 billion for the entire brewer and is expected to help Diageo reduce leverage.

Asahi targets East Africa’s beer market

Founded in Kenya in 1922, EABL is one of East Africa’s largest beer and spirits producers, with operations in Kenya, Uganda and Tanzania.

Its brands include Tusker, Senator, Serengeti, Chrome and Kenya Cane. Diageo’s international brands, including Guinness, Johnnie Walker and Smirnoff Ice, are expected to remain available in the region under long-term licensing agreements.

Asahi plans to acquire Diageo Kenya Ltd., which owns 65% of EABL, as well as Diageo’s 53.68% stake in UDV Kenya. EABL will remain listed in Kenya, Uganda and Tanzania.

Diageo exits direct EABL ownership

For Diageo, the transaction is part of a broader strategy to sell selected noncore assets, strengthen its balance sheet and reduce debt. For Asahi, the acquisition offers a major platform in East Africa’s beer and spirits market and expands the Japanese company’s international footprint.

Headquartered in Tokyo, Asahi is one of Japan’s largest beverage companies. The company reported revenue of about ¥2.895 trillion ($18 billion) in 2025.

The proposed $115 million reserve has now become a key issue between Kenya’s competition regulator, Diageo and Asahi, potentially determining when the $2.3 billion EABL transaction can finally close.