AB InBev, SABMiller deal wins U.S. approval, adds craft beer protections

Thu Jul 21, 2016 4:49am EDT
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By Lauren Hirsch and Chris Prentice

NEW YORK (Reuters) - Brewers Anheuser-Busch InBev (ABI.BR: Quote) and SABMiller SAB.L received U.S. antitrust approval for their $107 billion merger on Wednesday, bringing the largest-ever consumer products deal a big step closer to completion.

The combination of the world's top brewers, which together will make nearly 30 percent of the world's beer, now only needs regulatory clearance from China, a blessing that is widely expected given the proposed divestment of SAB's business there.

The deal has already been cleared by Australia, Europe and South Africa, and AB InBev said it still expects closure this year.

The U.S. Department of Justice (DOJ) approval, which is notable after the regulatory authority derailed several recent mega-mergers, came a day before SABMiller was to meet with shareholders at its annual general meeting in London.

While its takeover by the Belgian-based brewer of Budweiser is not yet on the agenda for a shareholder vote, there has been speculation in recent weeks that some activist shareholders may try to push for a renegotiation of terms, given the steep drop in the British currency.

AB InBev will make concessions beyond its publicly stated offer to sell SAB's stake in MillerCoors, its U.S. joint venture with Denver-based Molson Coors (TAP.N: Quote), as part of the deal. AB InBev will also have to curb its use of incentive programs to limit competition.

Reuters previously reported that the DOJ was investigating AB InBev's practice of financially rewarding beer distributors for selling more of its own beer than its competitors. Craft beer companies had vocally objected to the practice, which they argued hurt their ability to sell.

"Independent distributors that sell (AB InBev’s) beer will have the freedom to sell and promote the variety of beers that many Americans drink," Deputy Assistant Attorney General Sonia Pfaffenroth of the Justice Department's Antitrust Division said.   Continued...

A glass with beer and a bottle of Corona are seen in this picture illustration November 5, 2015.   REUTERS/Dado Ruvic/Illustration/File Photo