Johannesburg - The world's largest brewer, Anheuser-Busch InBev, gained conditional approval on Tuesday for its $100 billion-plus acquisition of SABMiller from South African anti-trust regulators, bringing the deal closer to fruition.
Conditions attached to the deal include a binding one that no South African employee be laid off because of the merger, the Competition Commission said in a statement.
Read: AB InBev sets record in SABMiller takeover
The commission said it had recommended to the Competition Tribunal, which has the ultimate say, that the deal be “approved with conditions”. Its recommendations usually meet the tribunal's approval.
Other conditions to the tie-up include a requirement the merged entity sell off SAB's stake in liquor maker Distell and that it make a R1 billion ($63.60 million) investment in South African agriculture.
The companies have also agreed to submit within two years of the merger “black economic empowerment plans setting out how the merged entity intends to maintain black participation in the company, including equity”, the commission said in a statement.
South Africa's government has a number of targets that companies must meet to lift the ownership of previously disadvantaged blacks in the economy.
Jobs are a major issue in South Africa, where unemployment is over 25 percent and income disparities are glaring, and AB InBev granted significant concessions on this front as it strives for approval of one of the largest corporate takeovers.
“The Commission received concerns regarding the potential impact of the proposed merger on employment... In this regard, AB InBev has undertaken that it will not retrench any employee in South Africa as a result of the merger. This condition will endure in perpetuity,” the commission said.
In the area of social development, AB InBev has committed to investing R1 billion rand over five years in to the agriculture sector that supplies the brewing business, with a focus on emerging black farmers.
“This investment will be utilised for the development of the South African agricultural outputs for barley, hops and maize, as well as to promote entry and growth of emerging and black farmers in South Africa,” the Commission said.
Last week, AB InBev gained EU antitrust approval for the transaction. The takeover will give the merged entity a third of the global beer market, selling twice as much beer as its nearest rival Heineken.
REUTERS