The European Commission, the European Union’s antitrust agency, has cleared the way for the world’s largest brewer, Anheuser-Busch InBev, to proceed with its proposed takeover of rival SABMiller.
The commission, the first major regulatory body to approve the $100 billion deal, approved the acquisition on the condition AB InBev sell nearly all of SABMiller’s beer business in Europe.
“Today's decision will ensure that competition is not weakened in these markets and that EU consumers are not worse off,” says Margrethe Vestager, commissioner in charge of competition policy. “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.”
The proposed transaction would bring together the world’s two largest brewers, creating a global juggernaut. AB Inbev's brands include Corona, Stella Artois and Budweiser. SABMiller owns brands such as Miller, Peroni, Pilsner Urquell and Grolsch. According to the commission, at global level the merged entity will sell twice as much beer and earn four times more profit than Heineken, currently the third largest brewer, and five times more beer and 12 times more profit than Carlsberg, currently the fourth largest brewer.
The proposed deal was finalized in November last year and is contingent upon receiving approval from a number of countries including the US.