Kenya Clears Diageo $2.3B Asset Sale

Diageo received approval from Kenya's antitrust authority for the sale of its local assets to Japan's Asahi Group, the regulator announced on Friday, 11 September. The beverage giant had announced in December of last year the sale of its 65% stake in East African Breweries Limited (EABL) to Asahi for $2.3 billion, aligning with its strategy to divest and exit the African market.

The approved transaction involves Diageo Kenya Limited and UDV Kenya Limited. Under the regulatory terms, the combined entity must reserve at least 20% of its retailer refrigeration space for competing brands.

The transaction faced several legal hurdles in Kenya, including a lawsuit by local distributor Bia Tosha that the court dismissed in April. Following that decision, EABL asked Kenya's chief justice in June to expedite hearings tied to the case.

The competition authority also mandated that EABL set aside sufficient transaction proceeds to settle any pending liabilities. Additionally, the regulator ordered that the merger must protect ongoing supplies and services while supporting the sustainability and growth of small local businesses.