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US DOJ approves Anheuser-Busch’s acquisition of SABMiller

DBR Staff Writer Published 21 July 2016

Anheuser-Busch InBev (ABI) has reached an agreement with the US Department of Justice (DOJ) clearing the way for approval of its $107bn acquisition of SABMiller.

The settlement requires ABI to sell SABMiller’s entire US business, including SABMiller’s 58% ownership interest in MillerCoors.

ABI owns and operates 19 breweries in the US.  It owns more than 40 major beer brands sold in the country.

ABI and MillerCoors jointly account for about 70% of beer sold in the US.  The acquisition would create several highly concentrated local geographic markets, with some combined shares of over 90%.  

The proposed settlement also requires the companies to divest the right to brew and sell all SABMiller beer brands currently imported or licensed for sale in the US. 

The companies will also sell all rights to SABMiller’s Miller-branded beer worldwide. 

The DOJ said the settlement will prevent any increase in concentration in the US beer industry, maintain competition between bud and miller beers, prohibit ABI from disadvantaging rivals with distributors and provide for review of the company's future craft beer acquisitions.

US DOJ’s antitrust division deputy assistant attorney general Sonia Pfaffenroth said: “The remedy we secured will help preserve and promote competition in the multi-billion dollar U.S. beer industry. 

“The two largest U.S. brewers – ABI and MillerCoors – will now remain independent competitors after the deal.  The settlement also preserves the ability of smaller brewers – including brewers of craft and import beers – to compete against ABI by protecting their access to important distribution networks.”

The proposed AB InBev-SABMiller merger is still subject to approval from the Chinese regulatory authorities, as well as other non-regulatory conditions, which are required to complete the transaction.

Image: The headquarters of the US DOJ. Photo: courtesy of w:User:Coolcaesar.