There Is Now Nothing to Stand in the Way of the World's Largest Beer Merger

AB InBev, already the world's largest beer conglomerate, is well on its way to becoming what it calls "the first truly global brewer," thanks to US antitrust approval of its proposed takeover of SAB Miller Plc. Despite a recent crackdown by the US Justice Department and the Federal Trade Commission on a spate of mergers in the office supply, cable, and oil-drilling industries, the US government has now officially approved the incorporation of these two beer giants.

Part of the deal is that AB InBev has agreed not to acquire SABMiller's stake in MillerCoors LLC. That means, following the closing of the acquisition, AB InBev will keep Budweiser, Beck's, and Stella Artois, while SAB Miller will keep Miller in the US and Peroni and Pilsner Urquell in Europe. AB InBev also had to agree to "refrain from practices" that restrict distribution of small craft and import breweries, thereby allowing them to compete.

Why would AB InBev agree to buy parts of SAB Miller without actually getting the rights to Miller beer in the US? The beer juggernaut wants badly to increase sales in emerging markets, like Latin America and Africa. AB InBev currently has almost no market presence in Africa, while SAB Miller has made inroads there.

The US regulators' approval is only step one toward completion of this acquisition. The companies are still awaiting China's antitrust approval. It appears that China will likely approve the deal, though, because Snow Beer will be sold off and won't go to AB InBev. Snow Beer is the best-selling beer in the world.

MUNCHIES reached out to AB InBev for comment, but has yet to hear back.

Regulators in the US seem pretty confident that the merger will not impact consumers negatively: "The two largest US brewers—ABI and MillerCoors—will now remain independent competitors after the deal," said Sonia Pfaffenroth, deputy assistant attorney general in the antitrust division. AB InBev's CEO, Carlos Brito, is stoked with the regulators' announcement. "Our combination with SABMiller will bring more choice to more beer drinkers—and extend the global reach of our iconic American brands, such as Budweiser—in markets outside of the US," he said.

This deal will indeed extend the global reach of AB InBev.