Megabrew: US Department of Justice set to give AB InBev green light for SABMiller deal
The US Department of Justice is set to approve Anheuser-Busch InBev's takeover of British drinks giant SABMiller.
The news follows the announcement on Tuesday that the Competition Commission of South Africa has provisionally approved the £71bn deal, which was agreed last October.
It has been widely reported in US media that the antitrust regulator is poised to approve the deal, although it could depend on competition measures that would keep the brewer from "edging craft brewers from shelves", Bloomberg reported.
At the global level the merged entity – which has become known as Megabrew – will sell twice as much beer and earn four times more profit than Heineken, currently the third largest brewer, and five times more beer and 12 times more profit than Carlsberg, currently the fourth largest brewer.
"Serious competitive concerns"
In April, a US antitrust organisation flagged "serious competitive concerns" with the deal, despite AB InBev announcing at the end of last year that it would sell SABMiller's 58 per cent stake in the US joint venture MillerCoors to Molson Coors Brewing.
"An AB InBev-SABMiller combination raises serious competitive concerns in the US beer market," Diana Moss, president of the American Antitrust Institute (AAI) said in a letter to the US Department of Justice.
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The proposed merger would "incent AB InBev to exercise market power both unilaterally and in coordination with rivals", the AAI said.
"Such effects would likely stifle important competition from smaller market participants such as craft brewers, raise beer prices, reduce quality and choice, and jeopardise innovation in this important sector."
Competition negotiations
In order to woo competition authorities across the world, AB InBev has committed to selling a number of SABMiller brands to assuage market concerns.
At the end of April, AB InBev told the European Commission it will sell off SABMiller's Eastern and Central European brands, which includes Pilsner Urquell, if the deal goes through to assuage competition concerns.
The company has already accepted a £1.8bn offer from Japanese drinks major Asahi to buy SABMiller's beer brands Peroni, Grolsch and Meantime.
AB InBev declined to comment.