AB InBev gets U.S. approval to acquire SABMiller

The U.S. Department of Justice Antitrust Division has given its approval to the merger of Anheuser-Busch InBev (AB InBev) and SABMiller. However, to gain U.S. approval, AB InBev must sell SABMiller’s entire U.S. assets, including its 58% stake in MillerCoors.

AB InBev had already agreed to sell SABMiller’s stake in MillerCoors to Molsen Coors, its joint-venture partner when it made the initial offer to acquire SABMiller in November 2015.

The settlement with U.S. regulators also prevents AB InBev from acquiring beer distributors or brewers, including craft brewers – without getting approval from regulators. Another condition prevents AB InBev from operating incentive programs that discourage independent distributors from selling imported beers or craft beers of competitors.

The remedy we secured will help preserve and promote competition in the multi-billion dollar U.S. beer industry,” said Deputy Assistant Attorney General Sonia Pfaffenroth of the Justice Department’s Antitrust Division in a statement.

Pfaffenroth added that the two largest U.S. brewers, Anheuser-Busch InBev and MillerCoors, will “now remain independent competitors (in the U.S.) after the deal,” Pfaffenroth said. “The settlement also preserves the ability of smaller brewers – including brewers of craft and import beers – to compete against (AB InBev) by protecting their access to important distribution networks. Independent distributors that sell ABI’s beer will have the freedom to sell and promote the variety of beers that many Americans drink.

AB InBev’s CEO Carlos Brito welcomed the decision, saying it represented a significant step forward in the deal.

We will continue to invest heavily in the US, including our efforts to build our entire portfolio of brands, support and incentivize our wholesalers, and compete effectively in a dynamic and fast-changing market,” he said.

While we will make some adjustments to certain aspects of our US sales programs and policies, our fundamental approach and commitment to this market will not change. We will continue to compete and win in the US marketplace going forward.

AB InBev has now obtained approval from 21 jurisdictions. Its last hurdle is getting approval in China, where it has agreed to sell SABMiller’s interest in China’s Snow Breweries to the state-backed China Resources Beer Co. for $1.6 billion.

Meanwhile, in London, a group of activist investors have put pressure on SABMiller to change the structure of its initial deal. They want SABmiller to reconsider the £44 per share offer from AB InBev following a drop in the pound sterling since the U.K. Brexit vote to leave the European Union. SABMiller’s board, which is meeting on Thursday, ahead of the company’s Annual General Meeting (AGM) has unanimously recommended the offer.

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