Kenya regulator stalls $2.3 billion EABL sale to Asahi

The Competition Authority of Kenya (CAK) has imposed new regulatory conditions that have stalled the $2.3 billion sale of East African Breweries Ltd (EABL) by Diageo to Japan’s Asahi Group Holdings. The regulator is demanding that EABL set aside a reserve fund of approximately 15 billion Kenyan shillings ($115 million) to cover potential liabilities and third-party claims that may arise following the transaction.

In addition to the financial reserve, the CAK has proposed that the merged entity must reserve at least 20 percent of its retail refrigeration space for products not branded by EABL or Asahi. This measure is intended to prevent the combined company from using its distribution network to exclude competing brands from the market.

Both Diageo and Asahi have rejected these conditions, describing them as unprecedented and lacking legal mandate. While the deal has already received regulatory approval in other East African markets where EABL operates, such as Uganda and Tanzania, the Kenyan requirements have created a stalemate. The transaction, which involves the sale of Diageo’s 65 percent stake, represents a major expansion for Asahi into the African market.