Beer giants Anheuser-Busch InBev and SABMiller get closer to becoming one

staff photo
Miller64 on display at a store in the U.S. (Tom Parker/Courtesy of SABMiller)

Miller64 on display at a store in the U.S. (Tom Parker/Courtesy of SABMiller)

The makers of Budweiser and Miller High Life are one step closer to becoming one beer company to rule them all after the U.S. Justice Department approved Anheuser-Busch InBev’s acquisition of SABMiller on Wednesday.

To protect the American beer industry, the Justice Department is requiring that Anheuser-Busch cannot own and sell Coors or any other MillerCoors brands in the U.S., the federal agency said in a release.

AB InBev expects to wrap up the $107 billion acquisition during the second half of 2016, the company said in a statement.

“With today’s agreement, we have taken a significant step forward on the transaction, which will create the world’s first truly global brewer,” AB InBev CEO Carlos Brito said in a statement.

“Our combination with SABMiller will bring more choice to more beer drinkers and extend the global reach of our iconic American brands, such as Budweiser, in markets outside of the U.S.”

AB InBev and SABMiller are the two largest beer sellers in the world. Their proposed deal is still subject to clearance from Chinese regulatory authorities as well as other non-regulatory conditions.

If the transaction successfully goes through, AB InBev will divest SABMiller’s U.S. interest in MillerCoors to the partially Denver-based Molson Coors Brewing Co.

Molson Coors would pay $12 billion to acquire AB InBev’s 58 percent stake in MillerCoors and will make and sell Miller Light, the No. 4-selling beer in the U.S, USA Today reports.

“This represents a critical milestone on our journey to take full control of MillerCoors upon the closure of the AB InBev-SABMiller merger,” Molson Coors CEO and president Mark Hunter said in a statement.

“The acquisition will allow us to simplify decision-making and reduce the complexities of dual ownership; it will allow us to become a more integrated and efficient brewer; and it will allow us to become a more effective competitor as a single owner, promoting consumer choice in an increasingly diverse and fast-growing brewing industry.”

Colorado’s craft brewers have been less than excited about the world’s largest brewers uniting especially in the wake of AB InBev purchasing craft brewers.

In June, the head of the Boulder-based Brewers Association penned an op-ed in the New York Times urging the Justice Department to look out for small brewers’ interests.

“The problem is that, along with being the world’s largest brewer, Anheuser-Busch InBev is also the biggest beer distributor in the United States,” Brewers Association president and CEO Bob Pease wrote.

“That means that Anheuser-Busch InBev can focus on building its own brands while effectively, and legally, shutting out competing craft brands.”

Deputy Assistant Attorney General Sonia Pfaffenroth said the Justice Department’s conditions “preserves the ability of smaller brewers — including brewers of craft and import beers — to compete.”

AB InBev cannot start or continue practices and programs that limit the ability and incentives of independent beer distributors to sell and promote the beers of its rivals. The brewer must also allow federal review of future acquisitions of brewers or distributors, the conditions state.

Business & data reporter Adrian D. Garcia can be reached via email at agarcia@denverite.com or twitter.com/adriandgarcia.

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