South Africa’s Competition Commission recommended Anheuser-Busch InBev’s takeover of fellow brewer SABMiller, taking the industry’s biggest-ever deal one step closer to completion.
AB InBev must sell SABMiller’s 26 per cent stake in local wine, cider and spirits producer Distell Group within three years of closing the deal, the Pretoria-based antitrust regulator said in an e-mailed statement on Tuesday. Retaining the stake, worth about $559 million, could hurt competition, it said. Other conditions include protecting jobs and setting up a 1-billion rand ($64 million) fund to support local farmers, agreed to by the government last month.
“These conditions address issues that were raised by various stakeholders since the announcement of the acquisition,” Competition Commissioner Tembinkosi Bonakele said in the statement. Those parties included South Africa’s government and labor unions, he said. AB InBev is “pleased” with the decision, the company said in a separate statement.
The ruling ticks another box for AB InBev as the brewer seeks regulatory approval around the world to combine with London-based SABMiller in a $106 billion deal. The Competition Commission missed at least four deadlines to complete its probe into the takeover of SABMiller, which traces its roots to 19th century Johannesburg. The matter will now pass to the Competition Tribunal for final approval.
AB InBev believes it’s on course to secure the necessary regulatory approvals to close the deal in the second half of the year, SABMiller said in a statement on Wednesday.
Remgro Ltd., the investment company that jointly owns a majority stake in Distell, said last year that it and its partner may be interested in buying the SABMiller shareholding. Distell’s brands include Savanna cider and Klipdrift brandy.
The Competition Commission’s conditions also included separating the combined company’s bottling operations with soft-drink makers Coca-Cola Co. and PepsiCo Inc., as well as a commitment to maintain black economic participation in SABMiller following the maturity of the Zenzele empowerment program in 2020. Funds such as Zenzele are set up to help compensate those discriminated against during apartheid.
News by Bloomberg, edited by Hospitality Ireland