AB InBev clears regulatory hurdle in Australia to merge with SABMiller

Brewing giant, AB InBev received another clearance on Thursday as the Australian Competition and Consumer Commission (ACCC) gave its go-ahead to the brewer’s pending merger with SABMiller.

“The ACCC found that the proposed acquisition would not significantly change the current market structure.”

“The ACCC considers that the proposed acquisition is unlikely to result in higher beer prices for consumers,” ACCC chairman, Rod Sims said in a statement.

The deal would not hinder competition in Australia because AB InBev sold its beers in the country through distributors, “has only a limited direct company presence in Australia and does not brew beer here,” the ACCC said.

While AB InBev is the No. 2 beer supplier in Australia, behind Lion Nathan, which is owned by Japan’s Kirin Holdings Co Ltd, the commission said, AB InBev until now does not have a direct distributorship or own a brewery in Australia. The two largest suppliers of beer in Australia are Lion Nathan and SABMiller through its acquisition of Carlton & United Breweries (CUB) in 2011.

However, to ease regulatory concerns that both companies may coordinate market activity, AB InBev has agreed to distribute its products itself.

The commission’s approval came one day after AB InBev confirmed the acquisition was on track to be completed this year as it reported first quarter profits fell 10% to US$9.4bn due to weakness in the Brazilian market.

The brewer sees the merger with SABMiller as key to improving falling beer demand in developed markets by building its presence in emerging markets like Africa and Latin America with high growth prospects.

The European regulatory commission has said it will rule on the merger on May 24. AB InBev has already made concessions in Europe to sell SABMiller’s brands in Western, Central and Eastern Europe.

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