South African Regulators Request More Time to Scrutinise MegaBrew Deal

05 Apr 2016 --- South African regulators have asked for an extension into their review of Anheuser-Busch InBev’s proposed $106 billion takeover of rival brewer SABMiller, saying “there is still work that needs to be done” and that there are a number of “concerns that needs to be considered and addressed”.

The extension marks the third time that the watchdog has asked for more time to scrutinise the deal, which was first announced in 2015.

The regulator, which had been due to deliver its recommendation on the deal today (Tuesday), is now expected to be granted for a further 15 days extension.

A spokesman for South Africa’s Competition Commission did not divulge what where the concerns about the deal, which is expected to be completed in the second half of this year, but said it was discussing the extension with the two brewers.

A spokesperson for AB InBev said: “We are confident that the Competition Commission is as committed as we are to ensuring that South Africa does not delay the global timetable for clearing the combination.”

Alongside waiting for approval in South Africa, the brewers are also waiting for clearance in a number of other key markets, including the US and Europe.

It is thought that the deal will not create competition issues in South Africa, where AB InBev has only a minimal presence.

Instead, it is thought that regulator has wider, social concerns about the deal, which has been dubbed MegaBrew due to the enormity of the union, and its impact on suppliers and employment.

According to a report in the Times, AB InBev would be forced to give assurances about the impact the deal with have on its relationships with its suppliers in South Africa.

It has also been suggested that regulators may be appeased by SABMiller’s influence in South Africa, where the company was founded and has a strong presence.

Central to the deal has been SABMiller’s presence in Africa which AB InBev believes could prove lucrative.

The maker of Budweiser and SABMiller agreed the blockbusting deal in November 2015, in a deal which brings together the world’s biggest two beer makers.

AB InBev is paying $63 for each share in SABMiller, whose brands include Peroni and Grolsch.