A final decision on the Diageo-Asahi transaction remains in limbo.
Two critical developments unfolded last week. Appearing before the National Assembly Committee on Finance and National Planning, Competition Authority of Kenya (CAK) CEO David Kimei publicly disclosed for the first time conditions Asahi and Diageo must meet before securing deal approval.
First, the regulator wants the companies to establish a dedicated financial reserve-equivalent to at least four percent of the transaction value-ring-fenced to cover third-party claims, regulatory actions, and historical disputes. Second, the merged entity must allocate 20 percent of its retail refrigerator space to rival products in bars, supermarkets, petrol stations, and hotels rated two stars and above.
A second, more alarming development followed: Parliament openly deviated from its mandate. Rather than sticking to its role of making policy, enacting legislation, and scrutinising regulatory oversight, lawmakers actively attempted to dictate the specific outcome of a case that remains pending before the antitrust authority.
The committee, chaired by Kuria Kimani, pressured Mr Kimei to introduce binding contracts to protect interests of EABL’s existing suppliers such as local sorghum farmers.
The MPs also directed CAK to submit to them documentary evidence of proposed safeguards for farmers and distributors within seven days. In response, Mr Kimei promised MPs that farmer contracts would be honoured and that the merged entity would reserve one-fifth of its retail fridge space for its rivals.
In a functioning competition regime, merger remedies are not negotiated in a committee room of parliament to appease a committee chairperson. They must stem from published market analyses and transparent, evidence-based proceedings where affected parties have a fair opportunity to respond.
A final determination should explicitly identify specific anti-competitive harms and demonstrate how each proposed remedy mitigates them. To date, none of this evidence has been presented to the public.
A regulator that negotiates merger remedies in a parliamentary committee-rather than publishing and defending them on the public record-invites a chilling question now being asked across the business community: are these conditions grounded in competition economics, or are they simply the product of whichever lobby reached the microphone first?
Parliament has every right to summon regulators and demand accountability for how laws are enforced. But it has no business co-authoring remedies for individual corporate transactions.
That is not oversight; it is political interference masquerading as accountability.
The long-term consequences are severe. If every high-profile corporate transaction becomes subject to parliamentary bargaining, international investors cannot rely on consistent, rules-based outcomes. Parliament is fundamentally unequipped to define relevant markets, assess substitution effects, or evaluate countervailing buyer power-the core analytical tools of merger control.
The transaction itself is straightforward: two willing multinationals agreed to an equity transfer. Diageo seeks to exit its controlling stake in EABL and UDV Kenya, while Asahi seeks to acquire it.
No production facilities are closing, no brands are being retired, and no workforce layoffs have been announced. Yet eight months later, the transaction remains trapped in a fog of parliamentary summonses, court injunctions, and regulatory improvisation.
The four percent reserve fund requirement-calculated against a transaction valued at nearly Sh300 billion-is particularly troubling. Who will control this money? Who decides where it is invested, and under what conditions will it be disbursed?
Placing vast sums of capital under discretionary control inevitably creates opportunities for rent-seeking. The public deserves to know the fund’s precise legal basis, its designated administrator, its investment guidelines, its intended beneficiaries, and the exact triggers for its release.
Regulatory remedies especially where the only change happening is in the shareholding register must remain proportionate, evidence-based, and strictly tied to demonstrated anti-competitive risks. I ask: where is the evidence to show that change of ownership from Diageo to Asahi will put existing farmer contracts or distributor agreements are at risk?
While Kenya’s competition regime has made commendable progress, it still lacks transparency in how merger remedies are designed, monitored, and enforced.
The CAK frequently summarises major merger decisions in brief press releases, keeping underlying economic reasoning, market data, and enforcement frameworks hidden from public view.
In a cross-border transaction involving a willing buyer and seller-where operating businesses remain open and the market’s physical structure stays unchanged-the burden of proof rests entirely on the regulator to justify why he is belatedly attaching hyper-specific and deeply invasive conditions such as sharing of refrigerator spaces in this transaction.