AB-InBev and SABMiller merger?

While I'm certainly no expert, I find it hard to believe that regulators could approve this deal. It would be a near monopoly on AALs, right? Might work for the worldwide market, but in the US, it would seem to be problematic.

 

About halfway through the article:

I also found this interesting, never realized who owned SABMiller, for some reason I always though it was some sort of South African conglomerate

 

yeah, I doubt the SEC would approve this. Plus something about these two seething, poison-spitting, warring gargantuas finally stop flailing away at each other after some 50-odd years, life as we know would stop instantaneously and every molecule in your body would explode at the speed of light. Total protonic reversal.

 

Ha, ha. Helps to read the entire article. I thought it ended at the long list of links and didn't read further.

But, glad to know the experts agree with me!

 

The Consolofragmentonic Effect, it has been predicted!

 

The department of justice would say it violates antitrust laws.

 

FWIW: http://brookstonbeerbulletin.com/reuters-hinting-at-possible-abisabmiller-merger/

 

Mother of god...

 

Yeah, Altria's huge minority share of SABMiller is a result of (pre-name change) Phillip Morris' 2002 sale of Miller to SAB (which, by then, was already headquartered in London). That's the twist with these multinational corporations, they really have no loyalty to any one nation or even an actual "home" country.

After the Molson-Coors merger, Canadians complained about Molson being "American-owned" while some US beer drinking xenophobes would claim Coors was owned by them damned Canadians (NOBODY wanted them!).

And, while ABInBev is headquartered in Belgium (as had been Interbrew and InBev), most of the current top executives originally came from Brazil's AmBev.

 

I thought Molson owned Coors and Coors teamed up with Miller?

 

As I understand, MolsonCoors is joint owned by the two companies - it was a combination and not one taking over the other.
MillerCoors is a SABMiller and MolsonCoors partnership (in America only) to increase their individual competitiveness vs. ABInBev. It's teamwork, not an actual company or anything.

 

Although this is a reasonable speculation.... I'm pretty sure a merger between the two would violate several laws preventing monopolies... even if ABInBev doesn't take SABMiller's share, it's still monopolizing the market for American Lagers.

 

MolsonCoors was a merger of the two companies - a "merger of equals" according to some headlines at the time - with the former Molson shareholders controlling 55% of the new company, but Coors family members remain in the company, including Chairman Peter Coors.

MillerCoors, which only exists in the US, is a joint venture, a merger of the US divisions of MolsonCoors and SABMiller.

 

As noted in other posts (and the links), the speculation has always been that a merged ABI-SABMiller would have to spin-off it's US division - what used to be Miller Brewing Co. - with the most likely purchaser being MolsonCoors (which owns, roughly, the other half of the joint venture MillerCoors).

AB-InBev's lawyers are pretty familiar with the US DoJ and their Anti-Trust division at this point - having worked out spinning off the rights of the Labatt brand in the US (to NAB) after the AB-InBev merger and, more recently, selling off the US rights to Corona and the other Modelo brands as well as Modelo's most modern and largest Mexican brewery to Crown/Constellation, after the ABI purchase of Groupo Modelo.

 

These big guys will do whatever they want. It will make little difference what the masthead says. Coming from a small business background, I always liked my competitors getting bigger; my customers always appreciated working with smaller flexible business partners. The big companies will get bigger, but not necessarily better. Generally speaking, I think mega-amalgamation creates opportunities for emerging local and regional brewers.

 

as rxeight mentions, the Department of Justice or the Federal Trade Commission is the regulator that approves. AB and Miller would submit themselves to the Hart Scott Rodino process which reviews the transaction for anti-competitiveness.

http://www.ftc.gov/bc/hsr/

and i agree, this seems like a big stretch for so many reasons. With U.S. market share of macros slowly eroding, why wouldn't either of these guys look at stuff in emerging markets? also, the u.s. craft beer market has to be compelling though neither could probably do a larger one again for anti-competitive reasons. so, organic growth there more likely.

 

Don't forget the EU, they review mergers for their market.

 

Some of the articles on Brito and InBev imply that if InBev were to stop expanding, it would simply collapse on itself. See here, for example: http://www.businessweek.com/articles/2012-10-25/the-plot-to-destroy-americas-beer

While many in the United States rightfully suspect that antitrust regulators would fight this in the States, I wonder what European regulators would think? What kind of market share would a combined ABInBevSABMiller have in the EU?

 

I thought MO spun off Miller as an independent company prior to the SAB purchase. Its hard to keep track of all the MO spinoffs though, Miller, Kraft, PMI, etc. Probably my best ever stock purchase decision was purchasing a bunch of MO in the late 90s and just holding.