EU approves giant beer merger, but requires sale of SABMiller assets

The European Union gave its blessing Tuesday to the merger of the world's two largest beer companies, Anheuser-Busch InBev and SABMiller, as long as most of SABMiller's business in Europe is put up for sale.

The purchase of SABMiller by AB InBev, expected to be worth some 77 billion dollars, would be one of the biggest acquisitions in history.

"Today's decision will ensure that competition is not weakened in these markets and that EU consumers are not worse off," EU Competition Commissioner Margrethe Vestager said in a statement.

"Europeans buy about 125 billion euros [139.35 billion dollars] of beer every year, so even a relatively small price increase could cause considerable harm to consumers," she added. "It was therefore very important to ensure that AB InBev's takeover of SABMiller did not reduce competition."

Belgium-based AB InBev owns brands including the Beck's and Budweiser beer labels, while British-South African firm SABMiller produces Coors, Foster's and Miller beer, among others.

In Europe, the two companies are the third and fourth-largest brewers by volume following Heineken and Carlsberg, according to the European Commission, the EU's executive.

To win EU approval, AB InBev offered to sell "practically the entire SABMiller beer business in Europe," the commission said. The Brussels institution said this addresses its competition concerns.

The Japanese company Asahi is set to purchase SABMiller's business in Britain, France, Italy and the Netherlands, including the Peroni, Grolsch and Meantime brands.

The SABMiller assets in the Czech Republic, Hungary, Poland, Romania and Slovakia will also be sold to "one or two purchasers," in a transaction that can take place after the merger, AB InBev said in a statement.

"We are very pleased with the positive decision of the European Commission," AB InBev chief executive Carlos Brito said. "With this clearance, we remain firmly on track for a closing in the second half of 2016."

The merger has now been approved in 14 jurisdictions in the Asia-Pacific, Europe and Latin America, AB InBev said.

But it still has to win the backing of regulators in the United States, where the two beer giants have overlapping business. Expectations have been high that US authorities will also require the companies to divest some of their business.

"In the remaining jurisdictions where regulatory clearance is still pending, AB InBev will continue to engage proactively with the relevant authorities to obtain the necessary clearances as quickly as possible," the company said in its statement.

Last update: Wed, 25/05/2016 - 00:21
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