AB InBev, SABMiller get another deadline extension

The U.K. Panel on Takeovers and Mergers on Wednesday, 4th November, agreed to extend the deadline for AB InBev’s $104bn takeover bid of its smaller rival, SABMiller, to give both companies more time to finalize the terms of the deal.

AB InBev now has until 5pm on 11th November GMT, to make a formal offer, or say it does not intend to make an offer. This would be the second time the U.K. Takeover Panel would grant an extension to both companies since they announced on 13th October to an ‘agreement in principle’.

People close to the discussions say that AB InBev is in talks to sell SABMiller’s MillerCoors’ U.S. joint-venture back to the joint-venture partner, Molson Coors Brewing. Without it, U.S. anti-competition regulators are unlikely to approve of the merger because that would give AB InBev 70 per cent of the U.S. beer market.

AB InBev’s deal is also likely to face anti-competition scrutiny in China, where SABMiller has 23 per cent market share in a joint-venture with Chinese government owned China Resources Enterprise Ltd. AB InBev also has a 14 per cent market share in China. Chinese officials are unlikely to agree to a merger that would allow a foreign company control more than a third of the market. The Chinese have also raised concerns about markets like Italy and the U.K. where AB InBev may have to sell-off rights to brands to reduce the market share of the combined brewers in those countries.

In South Africa, the merger has faced some resistance from unions who say that the merger would affect tax revenue and job security.

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