M&A Africa: South Africa Conditionally Approves AB InBev Take Over Of SABMiller

M&A Africa: South Africa Conditionally Approves AB InBev Take Over Of SABMiller

South Africa’s Competition Commission has conditionally approved  a take over bid by AB InBEv of fellow brewer SABMiller, bringing the  $100 billion deal that will create the largest business company closer to conclusion.

InBev agreed to sell SABMiller’s 26 percent stake in local wine, cider and spirits producer Distell Group in the next three years after the buyout and to keep all the employees of the South African brewer after the merger.

SABMiller employs more than 9,000 workers in South Africa.

Emphasis on protecting jobs in the Africa’s third largest economy after a merger has contributed to lengthy reviews of other global deals such as the soft-drink bottling tie-up among Gutsche Family Investments, Coca-Cola Co. and SABMiller.

“These conditions address issues that were raised by various stakeholders since the announcement of the acquisition,” Competition Commissioner Tembinkosi Bonakele said in the statement.

In April, InBev agreed to an involuntary job loss deal with the South African government and agreed to set up as $70 million fund that will be used to support smallholder barley, hops and malt farmers who have been supplying SABMiller.

The companies also agreed on a black empowerment program to ensure black participation in the new company over the next two years.

Other conditions of the Competition Commission’s recommendation include a call for the combined company to keep its bottling operations for Coca-Cola and Pepsi separated; to ensure that competitors aren’t blocked from buying bottle caps from the producer they’ll jointly own; and to give smaller beer producers access to beverage coolers it supplies to retailers and taverns, Business Journal reported.

InBev said in a statement that the company was “pleased” with the South African Competition Commission recommendation, which represents “an important milestone” in securing regulatory approval in South Africa.