AB InBev pledges no forced jobs losses over SABMiller deal

AB InBev, the Belgian-based brewer, which is in the midst of taking over its nearest rival, SABMiller has reached an agreement with the South African government in order to get the country’s Competition Commission’s approval for the deal.

As part of efforts to get the South African Competition authorities approval for the proposed merger, AB InBev has agreed that at no point in the future would there be involuntary or forced jobs losses in South Africa as a result of the merger.

The brewer has also agreed to maintain its total permanent employment levels in the country for a period of five years. In addition, the company will establish a 1 billion rand fund ($70m) that will help to finance social and economic upliftment programmes, including smallholder farmers who grow barley, hops and malt to supply SAB. The company committed to turning a net importer of barley into a net exporter of malt, the processed form of grain used in brewing beer. The fund will also go to promoting enterprise development and reducing the harmful effects of alcohol.

SABMiller traces its roots back to South African Breweries, which was founded in Johannesburg in 1895, 121 years ago and the company remains a major employer in the country, with more than 9,000 workers. AB InBev has already made similar deals to sell SABMiller’s joint-venture partnerships in Europe, the US, and China to assuage competition concerns about the takeover, but South Africa was considered the biggest obstacle to the acquisition.

The Minister of Economic Development, Ebrahim Patel, said the “The commitments made by the company are the most extensive merger-specific undertakings made to date in a large merger,” he said. “In our view, they meet the requirements of the competition legislation. The agreed terms will be placed before the competition authorities for consideration.”

The country’s Competition Commission has until May 5 to decide on the deal, having earlier sought deadline extensions.

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