Kenya’s High Court on Friday postponed until January 20 a hearing in a case seeking to stop Diageo’s $2.3 billion sale of its Kenyan unit, East African Breweries Limited (EABL), to Japan’s Asahi Holdings, Reuters reported.
Diageo said last month that it had agreed to sell its 65% stake in EABL to the Japanese brewer. The British spirits maker is selling non-core assets to cut debt and cushion the impact of U.S. tariffs, as well as a slowdown in sales linked to changing consumer behaviour.
The legal challenge was filed this week by Kenyan beer distributor Bia Tosha, which is trying to block the transaction over unresolved litigation dating back to 2016.
News of the case pushed Diageo’s shares lower. EABL has said the lawsuit has no legal or factual connection to the proposed sale.
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Bahati Mwamuye, the presiding judge, said the parties involved in the deal may proceed with preliminary steps such as applying for regulatory approvals, provided the transaction is not finalised before January 20, when the court will issue further directions.
The companies involved have said they expect the transaction to be completed in the second half of this year.
“We welcome the court’s decision to allow the regulatory phases of this transaction to continue,” EABL said in a statement.
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Image Credit: Reuters
