The sale of a Sh300 billion stake in East Africa Breweries Limited (EABL) has run into fresh uncertainity after beer distributor Bia ⁠Tosha issued a notice to appeal against the dismissal of its bid to stop the transaction.

The High Court on Thursday dismissed Bia Tosha’s petition to stop Diageo from selling its 65 percent stake in EABL to Japan's Asahi Holdings, as it implements a turnaround strategy to reduce debt and revive growth.

Bia Tosha issued a notice to appeal the High Court decision on Friday, adding a fresh hurdle to the completion of the deal, which is set to be one of the country's largest such transactions.

It wants to block the deal over pending litigation dating back to 2016, which revolves around a claim of unfair termination of distribution rights. The firm has made a multi-billion shilling claim against the brewer.

Bia Tosha is also enjoining the Capital Markets Authority (CMA) and the Competition Authority of Kenya (CAK) in the Court of Appeal suit, raising the stakes in the legal battle.

“Take notice that Bia Tosha Distributors Limited being dissatisfied with the ruling and orders of the Honourable Mr. Justice Bahati Mwamuye, delivered on the 9th day of April 2026, intends to appeal to the Court of Appeal against the whole of the said ruling,” Bia Tosha said in the notice.

The beer distributor reckons it would have difficulty pursuing Diageo in the UK if it is successful in pushing for damages against EABL in the distributorship row.

The firm says it was claiming damages of Sh25 billion from the termination of its contract 10 years ago.

Diageo had warned against granting orders freezing the deal, saying the underlying distributorship case should not derail the 65 percent stake sale because they are unrelated.

The British firm added that an order further prejudices the rights of third parties who were not part of the distributorship dispute.

“The Application is collateral to the pleadings, disproportionate to any pleaded right, and seeks orders whose practical effect would bind non parties and disrupt capital markets processes in multiple jurisdictions,” Diageo submitted.

Diageo's sale of assets such as EABL is seen as key to the group's strategy under new CEO Dave Lewis after years of stagnant or falling sales and growing investor unease.

The firm also faces tariff-related uncertainty, fragile global consumer sentiment, and evolving drinking preferences ⁠among some consumers.

Read: Diageo’s EABL sale back on track after court rejects distributor bid

Meanwhile, Asahi has been hunting for opportunities in markets, including Africa and South America, as it implements its global expansion strategy.

The Tokyo-headquartered group sees EABL as ⁠offering an attractive portfolio of brands, marketing capabilities and production facilities, its chief executive Atsushi Katsuki said when the deal was announced.

The parties expect the deal to be completed in the second half of this year.

Kenya Breweries Limited (KBL) also opposed the bid to freeze the deal, arguing that Kenya's attractiveness as an investment destination depends in part on the security and predictability of property rights and the ability of companies to engage in legitimate commercial transactions without unwarranted judicial interference.

Bia Tosha argues that KBL and UDV (Kenya) unlawfully terminated its routes in 2016 and withheld a Sh38 million goodwill refund.

It expressed fears that if Diageo is allowed to transfer its shareholding to Asahi before the case is determined, the British multinational would be beyond the court’s reach.

The firm argued that the sale will render its case useless as splitting the shares and the ‘exit’ of Diageo from the Kenyan market would have the effect of frustrating the realisation of any decree, which may be awarded in its favour.

The dispute stems from a 2000 agreement where KBL granted Bia Tosha the rights to distribute beer in Bisil, Kajiado, Kitengela, Athi River, Industrial Area, South B, Nairobi West, Kenyatta, Langata, Rongai, Kiserian Magadi, Upper Hill, Ngong Road, Hurlingham, Kawangware, Satellite, Dagoretti, UDV A, UDV B and UDV C.

The distributor paid goodwill of Sh27.3 million and the rights granted Bia Tosha to distribute KBL’s products excluding keg beer.

KBL then re-possessed Baba Dogo, Dandora I and II, and Kariobangi North from Bia Tosha, for the distributor to serve the new areas.

Bia Tosha requested for a refund of the goodwill for the territories that were repossessed, a request that was declined as KBL maintained that the amounts were non-refundable, and further claimed that it was within its discretion to appoint other distributors as the agreement was non-exclusive.

The High Court had in 2016 ordered the parties to maintain the status quo. The matter proceeded to the Court of Appeal.

Before the appeal could be heard, Bia Tosha filed an application in August 2016 seeking to cite KBL and EABL for contempt for violating the court orders.

In July 2020, the Court of Appeal suspended the proceedings before the High Court for the dispute to be determined by arbitration.

Bia Tosha moved to the Supreme Court and the apex court allowed the appeal, set aside the judgment and orders of the Court of Appeal and reinstated the High Court orders of June 29, 2016, where the matter is pending.

→skiplagat@ke.nationmedia.com

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