AB InBev to invest R1bn in SA as part of SABMiller deal
A number of concessions have been made to secure regulatory approval for its merger with SABMiller.
JOHANNESBURG - Anheuser-Busch InBev has promised to invest R1 billion to support emerging farmers, protect jobs and uphold broad-based empowerment as part of its acquisition of SABMiller.
The brewer and the Economic Development Department reached an agreement over concessions to secure regulatory approval for the merger yesterday.
The agreement will be brought before the Competition Commission for consideration.
AB InBev has also promised to support the participation of small local craft beer producers and to support schemes providing black people with opportunities.
The world's biggest brewer said the concessions, which also include a five-year freeze on layoffs, were agreed with the South African Ministry of Economic Development.
"It is expected that the agreement on terms between government and the merger parties will expedite the merger proceedings before the South African competition authorities," AB InBev said.
"The commitments made by the company are the most extensive merger-specific undertakings made to date in a large merger. In our view, they meet the requirements of the competition legislation," Economic Development Minister Ebrahim Patel said.
The Competition Commission this week extended its scrutiny of the deal, saying it needed at least another 15 days to complete its investigation. It has already extended the deadline four times.
South Africa has a history of taking its time over approving takeovers partly because competition authorities have a public interest mandate to safeguard jobs, in addition to an anti-trust mandate to protect competition.
In 2011, the regulator told US retailer Wal-Mart Stores not to cut jobs for two years following its acquisition of South African retailer Massmart, delaying implementation of the $2.4 billion deal by at least two months.
The commission investigates deals for any anti-trust issues and submits its views to the Competition Tribunal, which makes a final ruling on whether a deal should go ahead.
Ab InBev has already told European regulators of its plan to sell SABMiller's premium European brands to try to secure approval for its deal.