South Africa’s Competition Commission made one of the conditions for Anheuser-Busch InBev’s (ABI.BR) acquisition of brewer SABMiller for more than $100 billion (69 billion pounds), that SABMiller must sell its 26.4 percent Distell holding, which is worth around $565 million based on its current market value.
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The deal now goes to South Africa’sCompetition Tribunal for final clearance.
One of the conditions requires AB InBev to divest SABMiller’s share of the cider maker Distell Group (DTLJF) within three years after the AB InBev and SABMiller deal closes, the Wall Street Journal reports.
During the investigation, the commission has found that the proposed merger raises several competition and public interest concerns, and asked the Tribunal to address them. AB InBev is “pleased” with the decision, the company said in a separate statement. To address that concern, South African regulators said AB InBev ensured that employees involved in bottling operations for Coca-Cola wouldn’t also be involved in bottling operations for Pepsi, and there would be “no sharing of commercially sensitive information between the two”.
The commission expressed concern that these bottling arrangements for the two global leading soft drinks manufacturers could be a platform for coordination.
The Commission said that there are concerns regarding job losses following the merger, though AB InBev has promised not retrench people in South Africa.
In order to address this concern, AB InBev has undertaken to ensure that retail outlets and taverns which are exclusively supplied by it with beverage coolers or refrigerators are free to provide at least 10% of the capacity of 1 (one) such beverage cooler or refrigerator in such retail outlets or taverns. “This condition will endure in perpetuity”, the commission said. The commission said AB InBev agreed to supply caps to other companies for a period of five years after the merger.
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In South Africa, AB InBev supplies beer brands including Corona Extra, Stella Artois, Beck’s Blue and Budweiser. The Commission says AB InBev should continue to supply the small beer producers that SAB now provides.
