ANHEUSER-Busch InBev’s acquisition of SABMiller was approved by the Competition Tribunal on Thursday with a few amendments to the conditions proposed by the Competition Commission.
Material changes to the conditions include the timing of SABMiller’s disposal of its Distell shares. The details were confidential, the tribunal’s statement said.
The tribunal also tweaked rules regarding access rights of rivals to fridge space supplied to outlets by the merged group.
A three-day hearing was held before the tribunal last week. At the hearing, legal counsel for wines and spirits maker Distell argued that the commission’s recommendation that SABMiller sell its 27% stake in the company over a three-year period after the merger had raised shareholder concerns regarding the outlook, which posed a threat to the share price.
Distell’s counsel argued that the disposal period should be quickened.
The tribunal set a five-year period during which the merged group may not retrench staff. The rules governing fridge space would also last for five years, during this time the merged parties would have to allow 10% of fridge space to be occupied by competitors’ products.
During the hearings, Heineken, SA’s second-largest brewing company, argued that the conditions imposed by the commission that gave small craft brewers 10% of the merged parties’ fridge space should also be extended to larger competitors.
Heineken argued that SABMiller, which owns about 90% of SA’s beer market, would have an unfair advantage once it merged with AB InBev as it would gain more than 200 new brands.
This would make it hard for the Dutch brewer to market its products, which include Amstel.
To ensure the various promises made by AB Inbev and SABMiller are kept, the tribunal said a six-member implementation board would be created.
Three government ministries — economic development, trade and industry, and agriculture, forestry and fisheries — will each nominate a member of the implementation board.
The tribunal said the parties were entitled to request the "waiver, relaxation, modification and/or substitution of one or more of the conditions".
AB InBev issued a statement indicating it was unlikely to challenge the outcome.
AB InBev CEO Carlos Brito said in the statement on Thursday: "We are delighted by the Competition Tribunal’s decision to approve our proposed combination with SABMiller in SA, a market that would play a critical role in the combined company.
"We recognise South African Breweries’ important contribution to the country’s economy and society and look forward to building on this through the commitments we have made on jobs and employment, localisation of inputs and production, support for small suppliers and the promotion of black economic empowerment."
AB InBev said it had now obtained approval in 16 jurisdictions. Clearance decisions, with or without conditions, have now been obtained in: Asia-Pacific (Australia, India and South Korea); Africa (Botswana, Kenya, Namibia, SA, Swaziland and Zambia); Europe (the EU, Albania, Turkey and Ukraine); and Latin America (Chile, Colombia and Mexico). Approval in Ecuador is subject to certain conditions.
The $108bn transaction still hinges on approval from China and the US.
AB InBev is in a race against time to get final approvals by August 12, when SABMiller is scheduled to pay shareholders its dividend. AB InBev will receive the payout if the deal is completed by then.
