EU Anti-Trust Regulators clear the way for merger of AB InBev, SABMiller

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European Union Anti-Trust regulators, on Tuesday, said they have given their approval for the $108bn merger of two of the world’s biggest brewers, Anheuser-Busch InBev (AB InBev) and SABMiller.

However, the commission said the approval was contingent upon AB InBev divesting itself of SABMiller’s European assets.

“Today’s decision will ensure that competition is not weakened in these markets and that E.U. consumers are not worse off,” Margrethe Vestager, the commissioner in charge of European competition policy, said in a news release.

“Europeans buy around 125 billion euros of beer every year, so even a relatively small price increase could cause considerable harm to consumers. It was therefore very important to ensure that AB InBev’s takeover of SABMiller did not reduce competition on European beer markets,” she added.

In its review, the commission said it found that the transaction without concessions, would have most likely led to higher prices for beer in Europe, particularly in countries where SABMiller has been an active competitor.

The merger of two of the four largest brewers in European Economic Area “would have significantly increased the number of national markets where the merged entity and the two remaining major supranational brewers would encounter each other as competitors,” the commission said.

“Fewer players, encountering each other in a higher number of markets, would have found it easier to tacitly coordinate on prices at national level.”

The commission said the divestitures had eased its concerns about competition after the transactions.

“These commitments taken together address all the commissions competition concerns, including those based on an increased number of multimarket contacts, as AB InBev has committed to divest essentially all the European businesses that it initially planned to acquire from SABMiller,” the commission said.

In a released statement by SABMiller, the brewer said, the transaction has now been cleared in 14 jurisdictions, including the European Union.

“In the remaining jurisdictions where regulatory clearance is still pending, AB InBev will continue to engage proactively with relevant authorities to obtain the necessary clearances as quickly as possible,” SABMiller said.

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