Nairobi, Aug. 16 -- The Competition Authority of Kenya (CAK) is demanding that East Africa Breweries Limited (EABL) establish a Sh15.5 billion reserve fund before approving Diageo's sale of 65 percent stake in the brewer, forcing a stalemate in the Sh388.2 billion deal.

The competition watchdog wants EABL to establish a dedicated reserve equivalent to four percent of the transaction value that Japan's Asahi Holdings will pay Diageo for liabilities that will crystallise after the deal.

This has triggered protest from EABL and Asahi, who have accused the CAK of assuming powers of the court, multiple people familiar with the stalemate told the Business Daily.

The money would be ring-fenced and used to settle or resolve claims, disputes, l...