Justice Dept. Clears A-B & SABMiller Merger With Conditions

WASHINGTON, D.C. — The Department of Justice’s (DOJ) antitrust officials approved Anheuser-Busch InBev’s (A-B) $107-billion acquisition of SABMiller.

The approval is based on two contingencies: A-B’s agreement to divest the brewing and sale of SABMiller beers such as Miller Lite and Miller Life in the United States, and A-B must also seek DOJ review of any future acquisitions of beer distributors or craft beer brands, USA Today reported.

“The remedy we secured will help preserve and promote competition in the multi-billion-dollar U.S. beer industry,” Sonia Pfaffenroth, deputy assistant attorney general for the DOJ’s Antitrust Division, said in a statement.

Molson Coors will acquire A-B’s 58-percent stake in MillerCoors and will make and sell Miller Light and Coors Light in the U.S. Molson Coors will also have the rights to the Miller brand outside the U.S.

As a result, the two largest U.S. brewers — A-B and MillerCoors — will “now remain independent competitors [in the U.S.] after the deal,” Pfaffenroth explained. "The settlement also preserves the ability of smaller brewers — including brewers of craft and import beers — to compete against [A-B] by protecting their access to important distribution networks. Independent distributors that sell [A-B]’s beer will have the freedom to sell and promote the variety of beers that many Americans drink.”

The deal is expected to close in the second half of this year. A-B finalized the agreement to purchase SABMiller in November 2015, as CSNews Online previously reported. The post-merger company does not yet have a name.  

“With today’s agreement, we have taken a significant step forward on the transaction, which will create the world’s first truly global brewer,” AB InBev CEO Carlos Brito said in a statement. “Our combination with SABMiller will bring more choice to more beer drinkers — and extend the global reach of our iconic American brands, such as Budweiser — in markets outside of the U.S.”

A-B now has approval in 21 jurisdictions. Last month, the merger received approval from South Africa’s Competition Commission on the condition that it sell SABMiller’s stake in liquor maker Distell Group and invest $68 million in local agriculture and other development. With approval secured in the U.S., A-B now needs approval in China, where it has agreed to sell SABMiller’s stake in China’s Snow Breweries to the state-backed China Resources Beer Co. for $1.6 billion,  the news report noted.

Prior to this deal, A-B — the No. 1 global brewer — owned 44.3 percent of the world’s beer market by volume, and SABMiller — the No. 2 global brewer — owned 13.8 percent, according to research firm Euromonitor. Upon completion of the deal, A-B would control about 30 percent of global beer sales, according to Brito.