AB InBev says it has US approval for SABMiller merger
Anheuser-Busch InBev, the world's largest beer maker, announced on Wednesday that it has reached an agreement with the United States Justice Department that clears the way for US approval of its acquisition of SABMiller.
AB InBev, the maker of Budweiser and Bud Light, will sell SABMiller's entire US business to Molson Coors, as previously announced, as part of the agreement. That means Budweiser would continue to compete with Miller beer in the US.
The merger with the maker of Miller Genuine Draft, a deal valued at about US$107 billion, had raised concerns that a single company would control too much of the beer market. The combined company would have about 31 per cent of the global beer market, according to Beer Business Daily.
AB InBev also owns Corona, Stella Artois and Beck's. Earlier this year, it acquired craft beer maker Breckenridge Brewery, following its purchase of craft brewers Goose Island and 10 Barrel Brewing Company, as the popularity of craft beers has grown.
US lawmakers and independent breweries had expressed concern that a combined AB InBev and SABMiller would have too much influence over the distribution system, with the ability to squeeze out smaller rivals.
The agreement with the Justice Department requires AB InBev to notify the agency's antitrust division of any potential craft beer acquisitions for the next 10 years, and prohibits the company from certain practices that discourage beer distributors from selling rival craft or imported beers.
AB InBev CEO Carlos Brito has said the divestment would ensure that the company's market share in the US would not change after the deal.
As it struggles for growth in saturated markets such as the US, AB InBev is looking for growth in regions such as Africa, where SABMiller has a major presence. To ease concerns that it would have too much control of the market, AB InBev is selling brands in other parts of the world.
AB InBev says it has approval in 21 jurisdictions, including Africa and Latin America, and is working with authorities in areas where the deal is still pending. The European Union's regulator gave approval in May, conditional on the sale of practically the entire SAB beer business in Europe.
The company expects the deal to close later this year.