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Johannesburg - Anheuser-Busch (AB) InBev [JSE:ANB] granted South Africa’s Competition Commission a 15-day extension to its investigation into a proposed $105bn (R1.54trn) takeover of fellow brewer SABMiller [JSE:SAB], after the regulator failed to complete the probe by Tuesday’s deadline.
The antitrust agency now has until May 5 to complete an assessment into the impact of the acquisition on the South African market, Competition Commission spokesperson Itumeleng Lesofe said in e-mailed comments. He didn’t say why the investigation needed to be prolonged. It’s the second time this month the regulator has failed to meet a deadline after an April 5 date was also missed.
South Africa is just one of the countries where Leuven, Belgium-based AB InBev is battling regulatory authorities in an effort to combine the world’s two biggest brewers, and has agreed to retain a secondary listing on the Johannesburg Stock Exchange. The company also made an offer to European Union authorities earlier on Tuesday, a proposal that may include asset sales. It has said it plans to complete the deal by the end of the year.
Gaining regulatory approval in South Africa has been complicated by the involvement of the country’s Economic Development Minister Ebrahim Patel, who has filed a notice with the Competition Commission that he wants to take part in proceedings.
Wal-Mart Stores, the world’s biggest retailer, took 18 months to gain approval to buy a controlling stake in Johannesburg-based Massmart Holdings under Patel’s watch in 2011. SABMiller’s deal to merge its African soft-drink bottling assets with those of Coca-Cola has yet to be completed - 18 months after the agreement was announced.
“Patel always wants as much as he can get so is pushing further,” said Peter Attard Montalto, an economist at Nomura in London. “For me this confirms that National Treasury’s investor-friendly message is not wholly accepted by the rest of government.”
Development fund
Patel is demanding a development fund from AB InBev that’s substantially larger than the R200m one that Wal-Mart created for its acquisition of Massmart, Business Day newspaper reported on Tuesday, without saying where it got the information. The minister’s involvement could be the reason behind the delays, the newspaper said.
South Africa’s antitrust agency needs to make a recommendation about the deal to the country’s Competition Tribunal, which will then hold a hearing into the tie-up.
SABMiller shares gained 0.5% to 4 236 pence as of 16:34 in London on Tuesday. That values the maker of Grolsch and Peroni at £68.7bn (R1.438trn).
The drinks maker, which started selling beer to gold miners in Johannesburg in 1895, controls 90% of South Africa’s market.
