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Johannesburg - South Africa's competition watchdog will ask for another extension to scrutinise Anheuser-Busch (AB) InBev's planned R1.6trn takeover of SABMiller, its spokesperson said on Thursday.
The watchdog was due to finish its investigation on Thursday, after it was granted a 15-day extension to complete its scrutiny. It has already extended the deadline four times.
"I confirm that the competition Commission will not be issuing a decision on the SAB/ABInbev merger today. There will be another extension," Competition Commission spokesperson Itumeleng Lesofe told Reuters, without elaborating.
Lesofe said details would be provided at a later stage.
South Africa has a history of taking its time over approving deals, partly because regulators have a public interest mandate to safeguard jobs in addition to an antitrust mandate to protect competition.
On Wednesday, SABMiller and Coca-Cola agreed to concessions with government to win approval for a deal to combine their soft-drink operations.This deal echoes an agreement struck between AB InBev to create a R1bn fund that will support the South African beer industry and protect jobs in the country to help seal approval for its proposed takeover of SABMiller.Wal-Mart, the world’s biggest retailer, agreed to set up a R200m development fund when it acquired a controlling stake in Massmart in 2011.
READ: SABMiller agrees to SA funds for Coke bottle merger
On April 14, AB InBev agreed to create a R1bn fund that will support the South African beer industry and protect jobs in the country to smooth approval for its proposed.
The deal struck between the Budweiser maker and the South African government includes a pledge to preserve its full-time employment levels in the country for five years after the deal closes and to not make any involuntary job cuts, Leuven, Belgium-based AB InBev said.
It also includes financial help for new farms to produce raw materials like hops and barley for the combined company.
“This transaction is by far the largest yet to be considered by the competition authorities and it’s important that South Africans know that the takeover of a local iconic company will bring tangible benefits,” the country’s Economic Development Minister Ebrahim Patel said in the statement. “Jobs and inclusive growth are the central concerns in our economy.”
South Africa is just one of the countries where AB InBev is battling regulatory authorities in an effort to combine the world’s two biggest brewers. The company has also agreed to retain a secondary listing on the Johannesburg Stock Exchange and locate its Africa office in the city. SABMiller, which started selling beer to gold miners in Johannesburg in 1895, controls 90% of South Africa’s market.
Other commitments include work to reduce the harmful use of alcohol and support for South Africa’s empowerment policies, which aim to redress inequality caused by apartheid.
READ: AB InBev agrees to R1bn fund for SABMiller deal
- Additional reporting by Bloomberg.
