By Andy Young
The European Commission has cleared AB InBev’s proposed takeover of SABMiller, on the condition that virtually all of SABMiller’s European beer business is sold.
EU regulators did have concerns that the proposed transaction could have led to higher beer prices in some European countries where SABMiller is currently active, “because it would have removed an important competitor and made tacit co-ordination between leading international brewers more likely”.
Commissioner Margrethe Vestager, who is in charge of competition policy said: "Today's decision will ensure that competition is not weakened in these markets and that EU consumers are not worse off. Europeans buy around 125 billion euros of beer every year, so even a relatively small price increase could cause considerable harm to consumers. It was therefore very important to ensure that AB InBev's takeover of SABMiller did not reduce competition on European beer markets."
AB InBev said early on that it planned to sell SABMiller’s Peroni, Grolsch and Meantime brands, and the company has already accepted an offer from Asahi for those assets.
More recently AB InBev announced plans to sell SABMiller’s Eastern European brands in order to gain EU approval for the takeover. As yet a buyer has not been found for those brands, but the EU regulators said approval for the takeover was dependent on those assets being sold.
In a statement about the decision the EU said that the commitments to sell the SABMiller assets had solved the concerns it had about the takeover.
The statement said: “These commitments taken together address all the Commission's competition concerns, including those based on an increased number of multimarket contacts, as AB InBev has committed to divest essentially all the European businesses that it initially planned to acquire from SABMiller.
“The Commission's decision to approve the deal is conditional upon full compliance with the commitments.
“In view of the remedies proposed, the Commission concluded that the proposed transaction, as modified, would no longer raise competition concerns. Indeed, following the transaction, the intensity of competition in the European beer markets will remain unchanged.”
AB InBev welcomed the ruling, with CEO Carlos Brito saying: “We are very pleased with the positive decision of the European Commission. With this clearance, we remain firmly on track for a closing in the second half of 2016."
The European approval means the deal just needs regulatory clearance in the US and China for the takeover to go ahead.