SABMiller and Anheuser-Busch InBev
Public awaits the outcome of SABMiller proposed merger with Anheuser-Busch InBev
The pubic is now awaiting the outcome of the Tribunal’s decision in the large merger of SABMiller and Anheuser-Busch InBev, heard from 22 to 24 June.
The hearing followed the Competition Commission’s recommendations to the Tribunal that the merger be approved with conditions. The Commission found that the proposed merger raised several competition and public interest concerns. Several interested parties made submissions to the Tribunal during the three day hearing.
The submissions by third parties included organisations, such as competitors Heineken South African, as well as the Minister for Economic Development, The Black Business Forum represented by Thidiso Mokhoanatse, the SA SMME Forum, presented by Tebogo Khaas and the Tavern Owners Association represented by Boyce Mathibela.
Labour organisation with members at SABMiller, like the Food and Allied Workers Union, also made submissions.
AB InBev, the buyer in this transaction, is a public listed company on the Euronext Brussels and New York Stock Exchanges. AB InBev produces, markets and distributes beer, near beer and soft drink products. In South Africa, AB InBev supplies only beer products, including Corona Extra, Stella Artois, Becks Blue and Budweiser and it uses a global distributor.
The target company, SABMiller has primary listing on the London Stock Exchange and a secondary listing on the JSE. It is the largest producer of beer products in South Africa, with its main brands including Peroni, Carling Black Label, Castle Larger, Hansa and Castle Light. SABMiller. Through its subsidiaries, SABMiller manufactures, distributes and sells various alcoholic and non-alcoholic beverages. It also has interests in barley farming, hops production and bottling.
In the proposed transaction AB InBev would acquire control of SABMiller. According to the Commission, the companies are vertically integrated with their operations spanning manufacturing and the distribution of alcoholic beverages, particularly beer products, but AB InBev, while it has expansive brewing operations around the world, does not have brewing operations in South Africa or Africa. SABMiller, on the other hand, has significant brewing operations in South Africa and several other African countries.
Some of the recommendations that have been put forward by the Commission are: AB InBev not be permitted to appoint any directors to the board of Distell, a direct competitor, and one in which AB InBev will have holdings; a R1-billion fund to be made available over 5 years for the development of the South African agricultural outputs for barley, hops, maize as well as promoting the entry of emerging black farmers and an undertaking to continue to source products like glass bottles, cans, bottle crowns and raw materials for beer, from South Africa.
Communications: Competition Tribunal
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Registrar: Competition Tribunal
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