Fidelity bank banner Bayelsa State banner
US authorities okay merger deal between world’s top two brewers, AB InBev and SABMiller

By News Express on 21/07/2016

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 1,479

Anheuser-Busch InBev and SABMiller received approval for their $107bn merger from US antitrust regulators on Wednesday after the companies agreed to unload beer assets and preserve competition from independent craft brewers.

The Department of Justice (DOJ) approval comes with a number of stipulations and is notable after the regulatory authority derailed several recent megamergers over antitrust concerns.

The Belgian brewer will make concessions beyond its publicly stated offer to sell its stake in MillerCoors, its US joint venture with London-based SAB, as part of the deal. AB InBev will also have to curb its use of incentive programmes to limit competition.

Reuters previously reported that the DOJ was investigating AB InBev’s practice of financially rewarding distributors for selling more of its own beer than its competitors’. Craft beer companies had vocally objected to the practice, which they argued hurt their ability to sell.

“Independent distributors that sell (AB InBev’s) beer will have the freedom to sell and promote the variety of beers that many Americans drink,” Deputy Assistant Attorney-General Sonia Pfaffenroth of the DOJ’s Antitrust Division said.

The world’s top two brewers hold brands Budweiser, Stella Artois, Miller and Pilsner Urquell.

“While we will make some adjustments to certain aspects of our US sales programmes and policies, our fundamental approach and commitment to this market will not change,” said AB InBev CEO Carlos Brito in a statement.

AB InBev will also be required to secure the DOJ’s approval before acquiring any beer distributors or craft beer brands.

AB InBev has already acquired several regional craft beer companies, looking to benefit from a rapidly growing niche market in the slowing beer industry. Recent deals include Colorado-based Breckenridge Brewery, Oregon-based 10 Barrel Brewing and Virginia-based Devils Backbone Brewing.

“The DOJ’s significant requirements … appear to address some of our major apprehensions with the merger. With effective enforcement of these provisions, small brewers can rely on their independent distributor partners to access the market,” Brewers Association president and chief executive officer Bob Pease said in a statement on Wednesday.

The terms of AB InBev’s agreement with the DOJ expire in 10 years. AB InBev will divest the rights to all SABMiller beer brands currently imported or licensed for sale in the US.

Denver-based Molson Coors Brewing will buy SAB’s 58% stake in their US joint venture, MillerCoors.

Molson closed up 3% at $100.80 on Wednesday.

The deal changes little within the US market, according to Adam Fleck, equity analyst with Morningstar in Chicago. Still, he added: “There’s a chance to increase the profitability for Molson Coors and MillerCoors enterprises that will make MillerCoors more competitive.”

Globally, the deal positions the combined companies to produce almost a third of the world’s beer, dwarfing other major producers like Heineken and Carlsberg. InBev will have more breweries in Latin America and Asia and an entrance to Africa, as major markets such as the US weaken due to craft beer popularity. Australia, Europe and South Africa have cleared the deal. The companies are waiting for China to approve it although a proposed sale of SABMiller’s stake in CR Snow was expected to lead to clearance.

AB InBev reaffirmed its plan to close the deal by the end of the year. Shares of the company rose earlier after the DOJ announcement but were down less than 1% at $112.95 in late trade in New York. SABMiller closed up less than 1% in London.

•Text courtesy of Reuters. Photo shows AB InBev CEO Carlos Brito.

Source News Express

Posted 21/07/2016 11:59:21 AM


Share on facebook Yahoo mail icon Gmail icon Share on Google+




You may also like...
PDP Chair: South West group throws weight behind...

Ex-minister arraigned for alleged misappropriation of funds

Reps summon Service Chiefs over Southern Kaduna killings...

FG reaffirms commitment to Niger Delta diversification programme...

2015: Concerned Citizens of Akwa Ibom make case...

Lawyers head for court to challenge Canadian immigration...

Lagos Govt. restricts movement on Ikorodu road

Jonathan’s govt. fair to the South-East —Obi

Police confirms 11 children killed after van rams...

Nigeria’s growth excites World Bank

Rivers APC raises alarm over alleged plot to...

Corruption: Igbo Leaders of Thought fault Buhari


Latest News PDP National Convention: Party leaders disagree over venue Labour set for nationwide strike over minimum wage Osun Election: Protesters storm INEC Office, as PDP heads to court Court orders APC to conduct fresh election within 30 days Modric ends Ronaldo-Messi Era, wins FIFA Best Player of the Year Award Security operatives swoop ‘on PDP leaders in Osogbo’ Evil son kills father to inherit millions of dollars Troops rescue 73 Boko Haram hostages Bayelsa receives N24.16bn Paris Club refunds, slams Lokpobiri over N800bn debt claim Okowa inaugurated to chair PDP Convention Planning, receives award today in New York FRSC screens 300,000 applicants for 4,000 jobs I have no regrets, says kidnapper after arrest


Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (396,969 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (376,988 views) Shameless Genevieve Nnaji exposes breasts in public (308,823 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (250,812 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (232,512 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (221,752 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (200,271 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (181,796 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (165,927 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (163,496 views) Lagos plane crash: Journalist releases victims’ names (158,283 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (147,002 views)


Categories Advertorials (3) African Press Organisation (81) Art & Literature (63) Business & Economy (3,627) Business Verdict (52) Columnists (933) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (547) Features (653) Global Business Monitor (301) International (2,432) Interview (165) Live Commentary (28) Love Matters (144) News (39,118) Opinion (1,111) Pidgin (11) Politics (6,740) Religion (873) Sports (1,706) Stock Watch (34) AMA & Al Jazeera Global Update


CBN banner

Firstmobile banner




Anthony Joshua vs Alexander Povetkin: Highlights


APO Group Partner




GOCOP Accredited Member

GOCOP Accredited member



Africa Media Agency and Al Jazeera