London to review Interbrew-Bass deal
British authorities could force Interbrew to sell brands, pubs
Aug 22, 2000 - The European Commission has referred part of Belgian brewer Interbrew's acquisition of Bass to U.K. regulators. The referral only affects the parts of the deal relating to the U.K. beer sector.
Stephen Byers, Secretary of State for Trade & Industry, had asked for the chance to investigate the deal. The Office of Fair Trading will now have four months to decide whether to allow Interbrew to hold on to a position giving it at least one third of the U.K. beer market. Interbrew will also hold supply agreements with about one quarter of the U.K.'s pubs.
Analysts speculated that U.K. regulators would force the Belgian brewer to dispose of some brands, leaving it with a market share of no more than 30%.
Interbrew's acquisition of Bass flowing its purchase earlier this year of Whitbread's beer business for £400 million means it will have scooped up Britain's second and third largest brewers. Some analysts have put the market share as high as 36.5%, saying the deal gives the British authorities good reason for concern.
One analyst said Interbrew had no choice but to streamline its range of brands to win competition authorities' approval. "I think it will almost certainly be forced to [sell]," said Nigel Popham of Teather and Greenwood. "They will have to reduce their market share to 30%."
Interbrew sells about 120 brands in 80 countries. In addition to its flagship lager, Stella Artois, its top European brands include Leffe, Hoegaarden, Jupiler and Dommelsch.
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