The Justice Department on Wednesday signed off on Anheuser-Busch InBev NV’s roughly $ 108 billion acquisition of rival SABMiller PLC, after the beer companies agreed to several conditions to secure the government’s approval.
As part of the Justice Department and AB InBev settlement, the brewer agreed to allow antitrust enforcers to review the brewer’s future craft beer and distributor acquisitions. The settlement also prohibits the Belgian-based brewer from instituting incentive programs that encourage AB InBev distributors to sell and promote its beers over rivals.
AB InBev already had agreed to sell SABMiller’s U.S. business interest to Molson Coors Brewing Co. TAP.A 0.40 % in a pre-emptive move to win antitrust approval. The $ 12 billion sale to Molson of SABMiller’s 58% interest in MillerCoors and U.S. rights to brands like Peroni means AB InBev’s 45% share of the U.S. market won’t change.
Under the settlement, AB InBev will have to seek regulatory approval for future craft beer deals. The company has acquired more than a half dozen craft brewers. The craft segment is the fastest-growing in the industry.
AB InBev had faced sharp criticism of its acquisition from craft brewers and beer distributors when it appeared before a U.S. Senate subcommittee in December. Craft beer representatives argued AB InBev’s influence over beer distribution would make it harder for them to get beer on shelves.
The Justice Department’s merger clearance means AB InBev only needs Chinese regulatory approval before it can go forward with its acquisition of SABMiller. The deal also needs shareholder approval.
European and South African regulators already approved the deal. Analysts expect China to do the same after AB InBev agreed in March to sell SABMiller’s interest in Snow, China’s largest beer, to state-owned China Resources Beer Holdings Co. 0291 0.90 %
AB InBev has said it expects to close its takeover of SABMiller in the second half of the year. The beer deal will combine the world’s two largest brewers, creating a beer behemoth with about a 28% market share world-wide, according to industry tracker Plato Logic.
It is critical to AB InBev’s growth. The brewer’s business has been challenged by falling beer volumes in the U.S. and Brazil, which account for about half of sales.
Buying SABMiller gives it access to the growing African beer market, which is expected to drive beer-industry sales with compound annual growth in volume of 3.7% through 2020, according to Plato Logic.
The company has set a goal of increasing its annual revenue by more than 50% to $ 100 billion by 2020. It aims to hit that by selling Bud, Corona and Stella Artois across Latin America and Africa, markets that account for 68% of SABMiller’s revenue.