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: 1,397


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+


 

CLASSIFIED ADS

REVEALED: 3 natural ways to get stronger erections, last 25 minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

 

You may also like...
Buhari bares his fangs: The return of Abacha-style...

El-Rufai gives tanker drivers ultimatum to vacate Kaduna...

Yoruba Nation has the largest population in Nigeria...

‘Buhari soon to reshuffle cabinet’

Ekiti community accuses monarch of corruption, urges Fayose...

Military foils kidnap attempt; rescues 2 victims, nabs...

Wike, Dame Jonathan endangering peace in Rivers —APC...

Jonathan mourns with Dangote, Senator Ayogu Eze

1,000 teenage girls converted by force, married off...

Activists reveal how corruption cost Nigeria $1bn investment...

Scramble for African startups by venture capitalists: Yay...

NDLEA arrests suspected drug baron in Ekiti

 

Latest News Zinox Boss to FG: Use technology to eradicate corporate debtors, boost economy •Explains how it can be done Hundreds of Nigerian troops still missing after Boko Haram attack on base Robbers write Lagos communities, says ‘expect us soon’ Imo dep gov’s impeachment: God forgive us for making Okorocha gov — Umeh How Ekiti governorship election was won and lost Innoson heads to Supreme Court as Appeal Court rules GTB appeal can be heard Abeokuta Flood: Amosun warns against indiscriminate building of houses, dumping of refuse Alleged forgery of NYSC certificate: HEDA petitions IGP, seeks investigation of Finance Minister APC: Taking over Delta State in 2019 is not negotiable Adamawa Govt. orders removal of Dankwambo's presidential campaign billboard Reps’ panel to meet Obasanjo, Jonathan, Buhari on Abacha loot Saraki urges U.S. to take its rightful place in trade, investment in Nigeria

 

Most Read NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (361,099 views) Nigerian female sex addict opens up, says ‘I like it with both men and women’ (357,866 views) Shameless Genevieve Nnaji exposes breasts in public (286,150 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (234,793 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (213,978 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (212,228 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (186,004 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (167,997 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (156,056 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (152,325 views) Lagos plane crash: Journalist releases victims’ names (147,248 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (138,543 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (52) Business & Economy (3,341) Business Verdict (45) Columnists (886) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (516) Features (614) Global Business Monitor (284) International (2,129) Interview (157) Live Commentary (28) Love Matters (127) News (37,156) Opinion (1,021) Pidgin (10) Politics (5,572) Religion (783) Sports (1,609) Stock Watch (33) AMA & Al Jazeera Global Update

 

CBN banner

Firstmobile banner

 

 

NEWS EXPRESS TV

FRANCE vs CROATIA 4-2 Highlights & Goals 2018

 

APO Group Partner

 

 

CLASSIFIED ADS

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement