Johannesburg - Public interest considerations of the planned merger between the world’s largest brewer Anheuser-Busch (AB) InBev and fellow brewing company SABMiller appear to be behind the delay in the Competition Commission’s assessment of the transaction, according to competition law analysts.
AB InBev has agreed to an extension to May 5, after the commission missed Tuesday’s deadline.
It had also missed its previous deadline of April 5.
Read: AB InBev grants extension to SA's antitrust agency
There have been reports recently that Economic Development Minister Ebrahim Patel has filed a notice to be part of the proceedings and this is believed to be behind the delays. Attempts to get details of Patel’s submission yesterday were not successful.
The Competition Commission also declined to confirm if Patel had made an input in the merger. “Given that the investigation is ongoing, the commission is not in a position to provide details about the identity of stakeholders who have made submissions and the issues raised by such stakeholders,” spokesman Itumeleng Lesofe said.
Lesofe said the commission had requested the extension because it needed more time to evaluate the merger.
“The investigation has not been completed, and as such the commission is not in a position to make a recommendation to the Competition Tribunal. The outstanding work has been discussed with the merging parties,” he said.
He said the body was prioritising the merger and remained committed to complete the assessment of the transaction without undue delay.
Mike Holland, an economist at economic research company Pricemetrics, said yesterday that the Competition Act required the commission to consider the impact of a merger on public interest matters, in addition to competition.
“The act requires the Competition Tribunal to consider the effect of the merger on, among others, a particular industry, employment and the competitiveness of small businesses and firms owned by historically disadvantaged individuals.
“The minister is probably using this act. Perhaps he is concerned that the merger will have unintended consequences.
“I think he is looking for something similar to Massmart,” Holland said, referring to US retail giant Walmart’s multibillion-rand acquisition of local retailer Massmart.
In that merger, the government’s concerns about employment and small businesses stood out.
Union’s appeal
When the Competition Tribunal approved that merger with conditions, trade union SA Commercial, Catering and Allied Workers Union appealed the decision.
The Competition Appeal Court dismissed the appeal in March 2012. “(Patel) is a minister who believes in government intervention in key sectors of the economy. He sees this as an opportunity to get concessions on certain issues,” Holland said.
He, however, said he doubted if Patel’s interest would delay the AB InBev/SABMiller merger.
Nicola Theron, the managing director and the head of competition practice at consultancy group Econex, said yesterday that AB InBev and SABMiller’s merger raised very few competition matters.
“So it is really the public interest matters that need to be considered,” she said.
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