AB InBev inches closer to completing $106bn acquisition of SABMiller

Anheuser-Busch InBev NV, the world’s largest brewer, was on Tuesday recommended by South Africa’s Competition Commission to takeover fellow brewer SABMiller Plc in a $106 billion deal, the biggest-ever in the industry.

However, the regulator gave some conditions. AB InBev must sell SABMiller’s 26 percent stake in Distell Group Ltd. within three years of closing the deal, as retaining the stake, worth about $559 million, could hurt competition. The brewer must also protect jobs and set up a 1-billion rand ($64 million) fund to support local farmers. It has also committed to maintaining black economic participation in SABMiller following the maturity of the Zenzele empowerment program in 2020.

“The Commission received concerns regarding the potential impact of the proposed merger on employment … In this regard, AB InBev has undertaken that it will not retrench any employee in South Africa as a result of the merger. This condition will endure in perpetuity,” the commission said.

It had since submitted its recommendation to the Competition Tribunal, which has the ultimate say on the deal.

A statement by SABMiller on Wednesday says AB InBev believes it’s on course to secure the necessary regulatory approvals to close the deal in the second half of the year.

AB InBev had last week gained EU antitrust approval for the transaction which will give the merged entity a third of the global beer market.