This deal comes more than one year after the -billion monster acquisition of Kraft Foods Group by H.J. Heinz Company that formed the third-largest food and beverage company in North America and the fifth-largest in the world.
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For starters, the Justice Department is making AB InBev sell off its entire SABMiller operation in the US for the global deal to go through.
AB InBev also owns Corona, Stella Artois and Beck’s.
In a statement, Brewers Association CEO Bob Pease praised the stipulations saying, “the DOJ’s significant requirements, including the termination of incentive programs such as the Voluntary Anheuser Busch Incentive for Performance Program (VAIP), a cap on ABI’s self-distribution volume and other measures to protect distributor independence, appear to address some of our major apprehensions with the merger”. Finally, the companies will divest all rights to SABMiller’s Miller-branded beer worldwide. He and a bipartisan group of senators last November urged the Justice Department to protect craft brewers from potentially unfair and illegal trade practices by larger beer companies. “Independent distributors that sell Anheuser-Busch’s beer will have the freedom to sell and promote the variety of beers that many Americans drink”.
“The remedy we secured will help preserve and promote competition in the multi-billion dollar USA beer industry”, said Deputy Assistant Attorney General Sonia Pfaffenroth of the Justice Department’s Antitrust Division in a statement.
Anheuser-Busch InBev (ABI) has reached an agreement with the US Department of Justice (DOJ) clearing the way for approval of its $107bn acquisition of SABMiller.
“As AB InBev’s total outlay was $106-billion for SABMiller, this means they have paid $86-billion for the positions in the growth markets of Africa and Central and South America”, he said. Both The Children’s Investment Fund (TCI) and hedge fund Elliott Advisors have taken small stakes, prompting talk that the two could lead a push for AB InBev to bump up its cash offer.
SABMiller Plc reported higher first-quarter sales as the brewer enters the final stretch before being bought by Anheuser-Busch InBev NV in the industry’s biggest deal. “In this case, the companies proposed asset sales from the start that helped resolve antitrust officials’ concerns”, he says. In China, it has agreed to sell SABMiller’s ownership in China’s Snow Breweries, to state-backed China Resources Beer, for $1.6 billion. Regulators approved the deal on Wednesday on the condition that SABMiller sell its stake and that it also agrees to allow antitrust regulators to review any of the company’s future acquisitions of craft brewers and beer distributors.
Australia, Europe and South Africa have cleared the deal.
The company reaffirmed its expectation to close the global transaction in the second half of 2016.
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“There was pressure from some SABMiller shareholders to … reconsider the 44-pound-a-share offer following the plunge in the pound since the United Kingdom voted to leave the European Union”, writes Bloomberg’s David McLaughlin.
