AB Inbev merger with SABMiller gets the green light, with conditions

The commission has approved the deal but says a number of conditions must be first met.

Bottles of beer and cider produced by Belgian-Brazilian group Anheuser-Busch InBev, (Budweiser, Corona, Stella and Beck’s) and British brewer SABMiller (Peroni and Bulmers). Picture: AFP.

JOHANNESBURG - The Competition Commission has given the green light for the merger between AB Inbev and SABMiller to create the world's biggest brewer.

However, it's approved the deal with strict conditions to be considered by the Competition Tribunal.

The commission found that the deal raises several competition and public interest concerns and has moved to deal with these.

LISTEN: Merger with AB InBev/SABMiller.

It says AB Inbev has undertaken that it will not retrench any employees in South Africa as a result of merger.

It will also sell off its Distil shareholding within three years of the closing the deal.

But there are concerns that transaction will have a negative impact on the ability of small beer producers, such as craft brewers, to compete effectively.

Added to this, AB Inbev has undertaken to ensure that employees who are involved in bottling operations for Coca-Cola will not be involved in its operations for Pepsi.

A few weeks ago, the European Commission also approved the deal - also with conditions.

Australia has already approved the merger.

THE APPROVAL INCLUDES:

* Recommended to tribunal that Anheuser-Busch InBev-SABMiller deal be approved with conditions

* Found that proposed merger raises several competition and public interest concerns

* Concerned that AB InBev bottling arrangements for Coca-Cola, Pepsi could be a platform for coordination

* AB InBev has undertaken to ensure that employees who are involved in bottling operations for coca-cola will not be involved in its bottling operations for Pepsi

* Upon implementation of merger, AB InBev will be entitled to appoint a certain number of directors to board of Distell, its direct competitor

* AB InBev has undertaken that it will not retrench any employee in South Africa as a result of merger

* AB InBev will divest Distell shareholding within 3 years after closing date of transaction.

* Concerned that transaction will have a negative impact on ability of small beer producers, such as craft brewers, to compete effectively

* Recommended AB InBev continues to supply input products that are currently supplied by SAB to small beer producers