Humongous Beer Merger Clears Hurdle

(RTTNews) - UK-based SABMiller Plc. (SBMRY.PK, SAB.L) and Belgian brewer Anheuser-Busch InBev NV, or AB InBev (BUD, AHBIF.PK), the two largest beer companies in the world, have moved a step closer towards completing their $107 billion merger after receiving approval from U.S. antitrust regulators.

In November 2015, AB InBev formalized its offer to acquire SABMiller in a deal worth 71 billion pounds, or about $107 billion. In a related deal and in order to avoid antitrust fears, SABMiller agreed to sell its 58 percent stake in its joint venture with MillerCoors to Molson Coors Brewing Co. (TAP-A, TAP) for $12 billion in cash.

SABMiller said Thursday that U.S. Department of Justice or DOJ has given its clearance for its proposed combination with AB InBev. However, the approval comes with several conditions.

AB InBev said in a separate statement that it has entered into a consent decree with the U.S. Department of Justice, which clears the way for the U.S. approval of its merger with SABMiller. The company reaffirmed its expectation to close the global transaction in the second half of 2016.

As part of the consent decree with the DOJ, AB InBev has agreed to sell SABMiller's entire U.S. business, including its interest in MillerCoors, the right to brew and sell certain SABMiller beers in the U.S., and the worldwide Miller beer brand rights.

AB InBev's settlement with the DOJ also prohibits AB InBev from continuing practices that limit the ability of independent beer distributors to sell and promote the beers of AB InBev's rivals, including high-end craft and import beers.

In addition, AB InBev will be required to obtain the DOJ's approval for acquiring beer distributors or brewers - including non-HSR reportable craft brewer acquisitions.

AB InBev owns more than 40 major beer brands sold in the U.S., including Bud Light - the top-selling beer brand in the U.S. - and other popular beer brands, such as Budweiser, Busch, Michelob and Natural Light.

MillerCoors has the exclusive right to import into and sell in the U.S. certain beer brands owned by SABMiller, including Peroni, Grolsch and Pilsner Urquell.

AB InBev said that certain aspects of its U.S. sales programs and policies will be reviewed and modified to conform to the consent decree.