S.Africa approves AB InBev takeover of SABMiller
South Africa's Competition Tribunal approved Thursday the blockbuster buyout of SABMiller by the world's top brewer AB InBev, subject to conditions, paving the way towards completion of the huge deal.
Conditions include the sale of SABMiller’s stake in Distell Group, as South Africa’s regulator moved to protect competition and prevent job losses in the country’s struggling economy.
AB InBev’s acquisition of the London-based SABMiller was valued at $121-billion when it was announced in November and in line to be the third largest in history if it clears all regulatory hurdles.
But it is now worth considerably less given the plunge in the value of the pound after Britain’s vote to leave the European Union.
Current exchange rates put the value of the acquisition around $106.5 billion for Belgium-based AB InBev.
“The Competition Tribunal approved the merger between beer giants Anheuser-Busch InBev (AB InBev) and SABMiller plc subject to wide ranging conditions designed to address both public interest and competition concerns,” the tribunal said in a statement.
AB InBev, brewer of Stella Artois and Budweiser, secured approval from EU and Australian regulators in May.
Clearance has also been granted by several other countries including India, South Korea, Mexico and Chile.
The acquisition is poised to get approval from both the US Justice Department and China’s Ministry of Commerce, Bloomberg reported Thursday.
– Jobs scarce –
“We are delighted by the Competition Tribunal’s decision to approve our proposed combination with SABMiller in South Africa, a market that would play a critical role in the combined company,” the company said.
“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.”
Isaac Matshego, economist at Nedbank, said he hoped the takeover would bring investment into South Africa and boost local production infrastructure.
“If it does go through, AB InBev could use South Africa as its base for expansion to the rest of the continent, in that way preserving the thin job market,” he said.
“Naturally everyone is concerned about jobs at the moment, and it is important that AB InBev finds our local market attractive enough for investment.”
AB InBev sees the buyout of SABMiller as a key way to counterweight falling beer demand in big markets by building its presence in Africa and other regions where sales are rising.
SABMiller, which generates nearly a third of its profits from Africa, operates in 15 African countries, and has a stake in 22 others through a partnership with French drinks firm Castel.
The company has its roots in supplying beer to miners during the 1886 Johannesburg gold rush.
In April, AB InBev said it would sell SABMiller’s stake in leading Chinese beermaker Snow Breweries, in a move that appeared aimed at persuading Chinese regulators to sign off on the giant merger deal.