A-B, SABMiller Proposed Deal Moves Closer to Reality

BRUSSELS — The U.S. Justice Department is prepared to give antitrust approval to Anheuser-Busch InBev's (A-B) acquisition of SABMiller, reported Bloomberg. Sources say the $107 billion deal is on track for clearance later in June.

Approval could include limits on the combined company's ownership of distributors. A-B has already agreed to sell certain brands, including Miller in the United States and Peroni and Pilsner Urquell in Europe, in order to receive regulatory approval. It also agreed to sell SABMiller's 49-percent interest in China Resources Snow Breweries Ltd. to China Resources Beer Holdings Co. Ltd., as CSNews Online previously reported.

If approved, the merger would be the beer industry's biggest ever and cement the company's No. 1 rank in the global market, followed by Heineken and Molson Coors Brewing. The European Union and more than a dozen other jurisdictions have already approved the deal.

In the United States, smaller breweries have expressed concern about the merger, A-B's ownership of wholesalers and the incentives it offers distributors to promote its brands. Those rewards effectively limit sales of A-B's competitor brands, according to the Brewers Association.

"If you want to grow your business as a craft brewer, if you want to get your beer into a chain store, if you want to get your beer into the stadium, you need to use the Anheuser-Busch distributor or the MillerCoors distributor," stated Bob Pease, CEO of the Brewers Association. "Those are the only two options in most markets that have the horsepower to effectively bring your beer to the retail market."

Concessions in Europe include selling nearly all of SABMiller's beer business there. As Europeans buy approximately $139 billion euros worth of beer each year, even a small increase in market share could cause harm to European consumers, according to Reuters.

"It was therefore very important that AB InBev's takeover of SABMiller did not reduce competition on European beer markets," wrote EU Competition Commissioner Margrethe Vestager in a statement.

A-B is still seeking approval of the merger in China.