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Tribunal okays SABMiller takeover

| Wine and liquor

The Competition Tribunal has approved a merger between SA’s SABMiller and Anheuser-Busch InBev , which will create the largest beer brewing company in the world.

The R1.5 trillion deal, announced towards the end of last year, has raised concerns over competition and resulted in SABMiller and AB InBev agreeing to sell several assets, including SABMiller’s stake in local Distell Group for R9 billion, and several European brands.

It has also raised fears of job losses, and concerns that participants in an employee share-programme won’t be being fairly compensated.

The tribunal, in approving the merger, subject it to conditions to address both public interest and competition concerns arising from the merger.

In a statement released on Thursday, the tribunal said the conditions it has imposed are, for the most part similar to those proposed by the commission in its recommendation and those contained in an earlier agreement between the merging parties and three government ministries: Economic Development, Trade and Industry and Agriculture, Forestry and Fisheries.

Earlier this year, the takeover was cleared by the Competition Commission after AB InBev agreed to sell SABMiller’s R9 billion stake in wine and spirits maker Distell Group, protect jobs and set up a R1 billion fund to support the local beer industry.

Some conditions have been changed after submissions made to the tribunal.

These include: access rights of rivals to fridge space supplied to outlets by the merged firm, access of competitors to metal bottle crowns supplied by the SABMiller-controlled entity Coleus Packing has been altered from a limited period of five years, to an unlimited period as long as the merged entity continues to control Coleus, supply conditions of input suppliers, particularly in respect of barley farmers, the evergreen restriction on merger related retrenchments, while retained, has been clarified with a provision which shifts the burden of proving the retrenchment is a result of the merger to the employee after a period of five years, and a provision relating to an employee share scheme known as Zenzele, which was the subject of contention between the union Food and Allied Workers Union (FAWU) and the merging parties, has been removed at the request of both parties.

FAWU believed the programme should be wound up and participants paid the same as SABMiller shareholders stand to make from the $106 billion acquisition.

A key date in the process is August 12, when London-based SABMiller is scheduled to pay its dividend. AB InBev will receive the payout if the deal is completed by then.

Although approval has been granted in Europe, US authorities still have to approve the deal.

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