As expected, AB InBev announced that as part of the final agreement to buy SABMiller for $107 billion that SABMiller will sell its 58% share of its venture with Molson Coors to that company for $12 billion.
That deal includes rights to the Miller brand name and gives Molson Coors full control of operations.
The combined company will still need to address regulatory issues in other countries, particularly in China, where SABMiller has a 49% stake in Snow, the worldâ€™s biggest selling beer.
â€œThis combination would create the first truly global brewer,â€ AB InBev CEO Carlos Brito said after the final agreement was announced.
â€œThe transaction would strengthen AB InBevâ€™s position in key emerging regions with strong growth prospects such as Asia, Central and South America, and Africa,â€ AB InBev said in a statement. â€œThese regions have hugely attractive markets and will be critically important to the future success of the Combined Group.â€
The new company will be listed in Belgium, with secondary listings in Johannesburg, Mexico and New York.
Although selling its stake in MillerCoors was seen as vital to clearing the way for the takover, it will also undergo regulatory scrutiny in the U.S. After the announcement, Brewers Association CEO Bob Pease released this statement:
â€œThe Brewers Association, the national trade association for America’s more than 4,000 small and independent breweries, is carefully reviewing the terms of the acquisition announced today by AB InBev and SABMiller, and, in the days ahead, we would urge the Congress and the Department of Justice to closely examine the potential effects on the U.S. marketplace and American consumers of this proposed deal.
â€œThe size and scope of the ABInBev business has many ramifications for the U.S. beer industry, even with the divestiture of the MillerCoors joint venture. The most obvious is that AB InBev is still by far the largest brewer and beer distributor in the United States. It is vital for the continued success of small brewers that we have access to market with an independent and competitive middle distribution tier.
â€œOver time, ABInBev will have significant new global revenues to invest in the United States if it chooses to do so as a result of this acquisition. The MillerCoors operation will undergo significant changes. AB InBev’s new international footprint and scale give the company greater influence over commodities used in brewing and many other facets of the beer industry that could affect competition in the U.S. market.
â€œAll of these issues â€“ and their potential effect on small brewers, the broader industry and U.S. beer drinkers â€“ must be carefully weighed and scrutinized by antitrust authorities.â€