In October 2015 news broke of one of the biggest mergers in corporate history. Anheuser-Busch InBev and SABMiller, the two biggest beer producers in the world, agreed on terms for a gigantic deal to merge both companies. The merger is set to create a beer behemoth responsible for one in three beers sold worldwide. The final AB InBev offer is worth more than $110 billion. The combination would give AB InBev, already the world’s largest brewer, a massive operation in Africa, where it seeks greater presence in its thirst for profits, and more powerful dominance in Latin America.
As the New York Times reports, the European Commission has now signed off on AB InBev’s merger with SABMiller after the companies agreed to sell SABMiller’s premium brands in Europe and some other European operations.
In assuring regulatory aprovement around the world, AB InBev has made agreements in several jurisdiction to shed brands and other business operations.
In November 2015, they agreed to sell SABMiller’s 59% stake in MillerCoors in the United States to SABMiller’s partner in a joint venture, Molson Coors Brewing, for about $12 billion. That deal includes the global rights to the Miller brand and would make Molson Coors the second-largest brewer in the United States, behind AB InBev.
In March this year, China Resources Beer, a state-owned brewer, agreed to buy SABMiller’s 49% stake in the maker of Snow, the world’s best-selling beer. The deal would value SABMiller’s stake in CR Snow around $1.6 billion.
In April 2016, AB InBev welcomed an offer by Japanese Asahi Group Holdings to buy the beer brands Grolsch, Meantime and Peroni, as well as associated SABMiller operations in Britain, Italy and the Netherlands, for €2.55 billion, or about $2.9 billion.
AB InBev also said in April that it would be willing to sell SABMiller’s assets in the Czech Republic, Hungary, Poland, Romania and Slovakia as part of a package of divestments to win approval from European regulators.
The divestments are all contingent on the beerhemoth merger closing. AB InBev hopes to close the deal for SABMiller in the second half of 2016.
In its review, the European Commission found that the transaction, without concessions, would have most likely led to higher prices for beer in Europe, particularly in countries where SABMiller had been an active competitor. The EU said the divestitures had eased its concerns about competition after the transaction. In total, the beerhemoth merger has been cleared in 14 jurisdictions, including the European Union.
