LARGEST BEER MERGER IN HISTORY HAS BEEN APPROVED BY THE DEPARTMENT OF JUSTICE
$107 billion is a lot of money, and it’s the price tag attached to the biggest beer merger in history, recently approved by the Department of Justice (DOJ). The two beer companies, Anheuser-Busch InBev (ABI) and SABMiller, are the two largest in the world—or they were. Now, they have the green light to meld into one mega-company, according to Forbes. There are, however, an incredible list of conditions for it.
For starters, the new company will need to spin off all holdings of MillerCoors, a SABMiller subsidiary, in the United States. MillerCoors is of course responsible for anything under the Miller or Coors umbrellas. MillerCoors owns a majority of Coors, while Molson Coors owns the minority, at least in the U.S. Elsewhere, Coors is strictly owned by Molson Coors and Miller by SABMiller, which is based in London.
This provides smaller breweries with the warmth of knowing the two biggest didn’t just become the only gargantuan. All eyes were on the DOJ this week, because anything reeking of market dominance doesn’t really sit well in a country prideful of friendly competition.
"DOJ: Molson Coors and ABI have interactions outside the United States which present opportunities to facilitate coordination in the United States – opportunities that MillerCoors does not presently have. To address this competitive concern, the settlement provides additional relief aimed at protecting the competitive constraint that other brewers provide – in particular, brewers of high-end craft and import beers – on ABI’s and Molson Coors’ ability to raise prices, either unilaterally or through coordination, on their beers."
It’s a pretty huge deal regardless of conditions and ABI is more than aware of the ripples everyone’s on the lookout for. They released a statement to clarify.
"ABI: AB will not acquire a distributor if doing so would result in more than 10% of its annual volume being distributed through wholly-owned distributorships in the U.S. AB will not terminate any wholesalers as a result of the combination with SABMiller."
But it’s still a worrisome deal for any brewer, as it’ll mean that soon one company will control 29% of the world’s beer and make roughly $64 billion a year doing it. That doesn’t exactly sit well and it could impact what we drink in the future. While insiders expect the deal to officially close by year’s end, we’ll have to see how the merger fairs in other countries.