British multinational Diageo has moved to secure approval from the High Court of Kenya to proceed with the sale of its Sh296.7 billion stake in East Africa Breweries Limited (EABL), as legal opposition mounts against the proposed transaction.

The application comes in response to a fresh legal challenge filed by Kenyan distributor Bia Tosha Limited, which is seeking to block Diageo’s plan to divest its 65 per cent shareholding in EABL to Japanese beverage giant Asahi Group Holdings. The distributor argues that the transaction could adversely affect its commercial interests tied to EABL’s operations.

In court filings, Diageo has firmly distanced itself from the dispute, stating that it neither controls nor bears responsibility for EABL’s contractual arrangements with its distributors. The company told the court that EABL operates as a separate legal entity with its own management and governance structures, and that distributor agreements fall entirely outside the scope of the proposed share sale.

The case places a spotlight on one of the most significant corporate transactions in Kenya’s recent history, involving a major British multinational and a flagship East African brewer whose brands dominate the regional alcohol market. Legal experts say the dispute underscores the growing complexity of cross-border mergers and acquisitions, particularly where local commercial relationships intersect with global corporate strategy.

The High Court’s decision will determine whether Diageo can complete its exit from EABL and transfer control to Asahi, a move that would fundamentally reshape ownership at one of Kenya’s most influential listed companies. Beyond the immediate transaction, the ruling could set a precedent for how courts treat third-party commercial claims arising from large-scale corporate divestments in the country.