Anheuser-Busch InBev released a media statement yesterday on its negotiations with the South African government on its proposed take-over of SAB Miller. The Competition Commission has an extension until the 05 May to conclude its investigation of this transaction and make recommendations to the Competition Tribunal to either approve it with or without conditions, or block it.
According to the statement:
‘An agreed approach has been concluded between the South African Government and Anheuser-Busch InBev SA/NV (“AB InBev”) in relation to the public interest conditions that will be recommended to the Competition Commission and Competition Tribunal in connection with the proposed acquisition of SABMiller plc (“SABMiller”) by AB InBev. The package of commitments addresses employment, localisation of production and inputs used in the production of beer and cider, empowerment in the company, long-term commitments to South Africa and participation of small beer brewers in the local market.’
The commitments include:
- R1bn investment to support small-holder farmers as well as to promote enterprise development; local manufacturing, exports and jobs; the reduction of the harmful use of alcohol (including making available locally produced low and no-alcohol choices for consumers) and green and water-saving technologies. Part of this fund will finance 800 new emerging farmers and 20 new commercial farmers to produce barley, hops, maize and malt for the company, with the strategic intent to create additional jobs in the agricultural supply chain.
- No involuntary job losses in South Africa as a result of the transaction
- The company will maintain its total permanent employment levels in South Africa as at the date of closing, for a period of five years
- The company will work government to reduce the harmful use of alcohol, including through introducing and promoting no-alcohol and lower alcohol products, including through brewing these products locally where possible.
- The company will maintain South African Breweries’ current Zenzele BEE share-scheme until the scheme expires in 2020, and within two years of deal closure, outline its long-term empowerment commitments beyond 2020
- AB InBev’s regional head-office for Africa will be located in Johannesburg
- AB InBev already has a secondary listing on the Johannesburg Stock Exchange
- The company will support the participation of small craft-beer producers in local markets
Minister of Economic Development Ebrahim Patel is quoted as saying “South African Breweries – the SABMiller predecessor – has been an important company in the South African economy for many years. This transaction is by far the largest yet to be considered by the competition authorities and it is important that South Africans know that the takeover of a local iconic company will bring tangible benefits. Jobs and inclusive growth are the central concerns in our economy. Our competition laws specifically provide for consideration of the employment and public interest impact of mergers and acquisitions. Following the announcement of the proposed acquisition of SABMiller, the South African government carefully evaluated the likely impact on jobs, small businesses, farmers and economic empowerment. We engaged with AB InBev to identify commitments that can ensure that the transaction has a net benefit for the country. The commitments made by the company are the most extensive merger-specific undertakings made to date in a large merger. In our view, they meet the requirements of the competition legislation. The agreed terms will be placed before the competition authorities for consideration.”
Carlos Brito, CEO of AB InBev added: “We are pleased to have reached this agreement with the South African Government. As we have stated from the outset, we are excited about the growth opportunities and the role South Africa will play in our combined business. Recognizing South African Breweries’ important contributions to South Africa’s economy and society, our commitments seek to build on this deep heritage and we believe there is a huge amount that the two companies can achieve together to the benefit of all stakeholders.”
The company says that the agreement above will be provided to the Competition Commission for consideration as part of its assessment of the competition and public interest impact of the proposed acquisition. That assessment will culminate in a recommendation by the Commission to the Competition Tribunal.
See the rest of the statement here