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Analysts see ‘no issue’ with AB InBev takeover
Dec 10, 2015
(TDB) - Market experts “do not envisage anti-trust issues” arising in the US over AB InBev’s proposed £71 billion takeover of rival brewer SABMiller, following its CEO’s appearance in front of a Senate committee this week.
An update by brokerage firm Stifel to its clients seen by the drinks business says that it “still expects both transactions to close” in the second half of 2016.
Similarly, analysts at Nomura drew the same conclusion. It told its investors: “We do not envisage anti-trust issues in the US” following the hearing.
It follows AB InBev CEO Carlos Brito’s appearance in front of the Senate Judiciary committee on Tuesday, along with opponents of the SABMiller deal.
Stifel told investors on Wednesday that opponents “were unsuccessful” in their arguments surrounding a possible adverse impact to craft brewers.
Bob Pease, CEO of the Brewers Association, said that AB InBev’s ownership of several distribution companies gives it an unfair advantage in getting its brands onto shelves and into bar taps – an advantage he argued would be even greater following the SABMiller takeover.
This fear was shared by a number of the Justice Committee members. Democrat Sen. Chris Coons said: “Nobody wants to take a seat at a bar and discover their only choices are between a Bud and a Miller.”
However, Brito committed under oath to limiting the percentage of its brands that it would list in its owned distributors to “around 10%”.
“We think [this commitment] is the most significant takeaway” from the hearing, Stifel said.
The SABMiller takeover will create the biggest brewer in history with control over one in three beer sales worldwide, should it be given regulatory approval to go ahead.
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