South Africa’s Competition Commission extends ruling on AB InBev, SABMiller merger

South Africa’s competition commission has extended a ruling for Tuesday’s deadline of their review of the pending merger between AB InBev and SABMiller, saying that the deal raises concerns that need to be resolved.

A spokesman for the commission, Itumeleng Lesofe, said the commission had “communicated the concerns to the merging parties and need more time to engage with the parties in order to find solutions to the said concerns.” He didn’t say what the concerns were and how the merging parties might resolve them. He said the commission is still discussing the extension with the brewers.

A Spokeswoman from AB InBev, said the company agreed to the extension. “We are confident that the competition commission is as committed as we are to ensuring that South Africa does not delay the global timetable for clearing the combination,” she said. The deal is supposed to close in the second-half of the year.

Legally, the competition commission can ask for an extension of up to 15 days, said Lesofe, spokesman for the commission. This will be the fourth extension the commission has requested.

South African competition regulators have a history of delaying mergers and acquisitions, or foisting burdensome conditions because the mandate for the commission is to preserve jobs.

In 2011, the South African regulators told U.S retailer, Walmart not to cut jobs for two years following its acquisition of South African retailer, Massmart. The process delayed the $2.4bn merger by at least two months.

Trevor Striling, a research analyst at Bernstein, who has voiced his opinion in the past of the commission’s tactics for delaying mergers, said it remains to be seen how many more extensions the regulator will request.

“Fifteen days in itself is not significant. We really have to see what develops from here. Does the Commission need more extensions? Does the Tribunal end up holding public hearings? Is there an appeal to the Competition Appeal Court? Those are all the things that would be significant,” he said.

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