European Commission approves AB InBev’s acquisition of SABMiller
"The decision will ensure that competition is not weakened and that EU consumers are not worse off,” said Commissioner Margrethe Vestager, who is in charge of competition policy.
“Europeans buy around €125bn of beer each year, so even a relatively small price increase could cause considerable harm to consumers. It was therefore very important to ensure AB InBev's takeover of SABMiller did not reduce competition in European beer markets."
The deal is set to bring together AB InBev and SABMiller, the world’s largest and second largest brewers respectively.
In Europe, they are the third and fourth largest brewers by volume (Heineken and Carlsberg being the market leaders).
The Commission’s concerns had been that the takeover, as originally outlined, could have led to higher beer prices in Member States where SABMiller is active at present.
It had believed the merger could remove an important competitor and make tacit co-ordination between the brewers more likely.
“By offering to divest practically all of SABMiller's beer business in Europe, AB InBev has addressed these concerns,” said the statement from the European Commission.
AB InBev agreed last month to sell SABMiller brands Peroni, Grolsch and Meantime (based in Italy, the Netherlands and London respectively) to Japan’s Asahi Group Holdings.
It followed this by offering to sell SABMiller’s central and eastern European assets (covering Hungary, Romania, Czech Republic, Slovakia and Poland).
“These commitments, taken together, address all the Commission's competition concerns, including those based on an increased number of multimarket contacts, as AB InBev has committed to divest essentially all the European businesses that it initially planned to acquire from SABMiller,” continued the statement from the Commission.
“In view of the remedies proposed, the Commission concluded the proposed transaction, as modified, would no longer raise competition concerns.
"Indeed, following the transaction, the intensity of competition in the European beer markets will remain unchanged.”
It adds that its approval is conditional on full compliance with the commitments.
Takeover on track, says AB InBev
AB InBev says its takeover of SABMiller will create a ‘truly global brewer’. It has welcomed the Commission’s announcement, calling it a significant milestone as it seeks to secure the necessary regulatory approvals to allow for closing in the second half of 2016.
In markets where regulatory clearance is still pending, AB In Bev says it will continue to engage proactively with authorities to gain the necessary clearances as quickly as possible.
“AB InBev has now obtained approval in 14 jurisdictions,” said a statement from the company.
“Clearance decisions, with or without conditions, have been obtained in Asia-Pacific (Australia, India and South Korea); in Africa (Botswana, Kenya, Namibia, Swaziland, and Zambia); in Europe (the EU, Albania and Ukraine); and in Latin America (Chile, Colombia and Mexico). Approval in Ecuador is subject to certain conditions.”