AB InBev wins China’s tentative approval to buy SABMiller.
SABMiller’s stake in Snow beer will be sold to satisfy regulators
LONDON — A huge beer merger took two major steps toward completion Friday.
Anheuser-Busch InBev said Friday that it had received conditional approval from Chinese regulators for its merger with SABMiller after the companies agreed to sell SABMiller’s stake in the maker of Snow, the world’s bestselling beer. The conditional approval by Chinese authorities is the last major regulatory hurdle for the transaction.
SABMiller’s board, meanwhile, said it would recommend that shareholders accept an increased cash offer by AnheuserBusch InBev that valued it at about $104 billion.
The merger would create an industry giant accounting for about 30 percent of global beer sales and would give AnheuserBusch, already the world’s largest brewer, a substantial operation in Africa, where it has little presence, and greater dominance in Latin America.
To win regulatory approval in China, Anheuser-Busch InBev agreed in March to sell SABMiller’s 49 percent stake in the maker of Snow to China Resources Beer, a stateowned brewer, for about $1.6 billion. China Resources Beer already owns the other 51 percent of the brewer, C.R. Snow.
“The Ministry of Commerce’s approval is a significant milestone for the transaction,” AnheuserBusch InBev said in a news release Friday. “It remains our objective to close the transaction in 2016.”
Anheuser-Busch InBev has received regulatory approval in 23 jurisdictions for the transaction, including China, the European Union, South Africa and the United States.
The brewer has entered into a number of agreements to sell assets from the combined company to satisfy regulators about the deal.
In November, Anheuser-Busch InBev agreed to sell SABMiller’s 59 percent stake in MillerCoors in the United States to SABMiller’s partner in a joint venture, Molson Coors Brewing, for about $12 billion.
In April, it accepted an offer by Asahi Group Holdings of Japan to buy the beer brands Grolsch, Meantime and Peroni, as well as associated SABMiller operations in Britain, Italy and the Netherlands, for $2.8 billion. Anheuser-Busch InBev also said in April that it would be willing to sell SABMiller’s assets in the Czech Republic, Hungary, Poland, Romania and Slovakia as part of a package of divestments to win approval in Europe.
The approval in China came as Anheuser-Busch InBev hopes to convince SABMiller shareholders that the deal is worthwhile.
On Tuesday, AnheuserBusch InBev raised its offer to $59 a share in cash, an increase of 1 pound a share from its previous offer.
The higher bid came as the value of the pound has declined sharply after Britain’s vote to leave the European Union last month.
As part of its proposal, Anheuser-Busch InBev made an alternative offer to win the support of SABMiller’s two largest shareholders — U.S. tobacco giant Altria and the Santo Domingo family of Colombia — that would give investors restricted shares instead of cash. The share alternative was intended to allow them to avoid a huge tax bill from the sale of their holdings.