E-Malt.com News article: Kenya: Heineken subsidiary threatens Asahi’s bid to acquire Diageo breweries in Kenya

A regulatory complaint filed by a Heineken subsidiary in recent weeks is threatening to disrupt the $2.3 billion acquisition of Diageo’s East African Breweries Limited (EABL) by Japan’s Asahi Group, Semafor reported on April 29.

Kenya Wine Agencies Limited (KWAL) accused EABL of abusing its dominant market position, and raised concerns that the acquisition could entrench alleged long-standing anti-competitive practices by the brewer, according to three people with direct knowledge of the complaint, including two working for KWAL.

The people told Semafor that the company wants the Competition Authority of Kenya (CAK) to review the deal’s potential effects on the market and set conditions for its approval to promote fair competition for smaller players. The regulator acknowledged queries from Semafor regarding the complaint and promised to respond “as soon as possible,” but had yet to do so by the time of publication.

The complaint by KWAL noted EABL’s sustained dominance across segments including beer and spirits, and highlights several alleged anti-competitive practices by the company, such as abuse of their market power by locking in distributors and suppliers to exclusive agreements that enables them to dictate prices.

“Our fear is that these factors will be amplified should the merger go ahead,” a KWAL source told Semafor, adding that the company wants CAK to put in place conditions to correct EABL’s “abusive dominant position” as the market leader.

The Asahi-Diageo deal, announced in December, is still pending regulatory approvals from the competition authority as well as regulators in Tanzania and Uganda. The transaction is expected to close in the second half of 2026.

Neither KWAL nor EABL responded to requests for comment.

London-headquartered Diageo’s sale of its 65% stake in EABL forms part of its turnaround strategy, which involves offloading non-core assets to reduce debt and accelerate growth. Asahi, on the other hand, is keen on expanding its geographic footprint and is counting on the EABL deal to deliver long-term growth “driven by population increase and economic expansion.”

EABL, whose net profit for the six months to December 2025 rose 38% to $87 million, operates primarily in Kenya, Uganda and Tanzania and is one of the region’s largest public companies. Its portfolio includes beer brands Tusker and Serengeti, and the company plans to enter into long-term licenses for Diageo’s global brands such as Guinness and Johnnie Walker to continue selling them in the region after the acquisition.

Some analysts argue that the acquisition is likely to be approved without conditions to correct the alleged abuse of dominance, given the dismissal of long-running complaints from other players in the sector over the years.

Ian Mwangi, a Nairobi-based economist, also told Semafor that EABL’s healthy cash position and liquidity meant that it was likely to absorb any shocks in the medium-term should the regulator set unfavourable conditions.

“EABL has been accused of abusing its dominance in the past and regulatory action was not taken,” he said. “I don’t think the change from Diageo to Asahi will change that.”


29 April, 2026