Court clears $2.3bn breweries sale

A Kenyan court on Thursday dismissed a bid to stop Diageo’s DGE.L $2.3bn sale of its local subsidiary East African Breweries Limited (EABL) to Japan’s Asahi Holdings, reports CNBC Africa. London-listed Diageo, maker of Johnnie Walker whisky and Captain Morgan rum, said in December it had agreed to sell its 65% stake in EABL to the Japanese brewer, as it implements a turnaround strategy to reduce debt and revive growth. But the deal soon ran into uncertainty after Kenyan beer distributor Bia Tosha petitioned the High Court to block the deal in January over pending litigation dating back to 2016. The court rejected the bid, paving the way for the completion of the deal, which is set to be one of the country’s biggest such transactions. Bahati Mwamuye, a High Court judge, added that any other orders that could impede the completion of the deal were all lifted. EABL welcomed the ruling and pledged to prove its case in the underlying dispute, which revolves around a claim of unfair termination of distribution rights. Lawyers for Bia Tosha did not comment. The completion of the deal is also important to the Kenyan Government, which is seeking to attract foreign investors in order to boost its industrial sector and create jobs, government officials have said, since failure would send the wrong signal. The parties expect the deal to be completed in the second half of this year.

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