Although this story involves beer rather than wine and only projects possible legal issues, it may be relevant to future wine industry acquisitions as well.¬†SABMiller has made news of late with its bid to purchase Foster’s, an Australian brewing company, for $10.2 billion. However, SAB Miller, the second largest brewing company worldwide, is also being eyed for acquisition. The largest brewer, Anheuser Busch InBev, is looking at a cash takeover ¬†of SABMiller that would likely be in the range of $80 billion dollars and create a new conglomerate consisting of one third of the global brewing business. AB InBev’s Chief Executive Carlos Brito said the deal may take place in 2013.

The proposed takeover raises antitrust issues in the US as well as China. AB Inbev controls a 50 percent market share in the US. SABMiller holds a controlling interest of MillerCoors, which itself represents about a 30 percent market share in the US; the merger of the two under single ownership would be sure to raise red flags with US legal authorities. Similarly, SABMiller’s interest in Chinese brewer CR Snow may be an issue, as AB InBev already has a strong presence in that country. In order to avoid legal issues, the new conglomerate may see forced sell-offs in those markets. Establishment in the US market, however, is not what makes SABMiller attractive to AB InBev; SABMiller is stronger in emerging markets in Africa, South America, and Eastern Europe, where AB InBev is a much less dominant force.

The large scale consolidation in the brewing industry may be nearing an end with this potential deal; SABMiller is among the last of the large companies that is not family-controlled, making it easier to push an acquisition through. It waits to be seen if corporate acquisitions in the wine industry will lead to similar consolidation in years to come.

Official information on any developments will likely be announced on AB InBev’s Global Press Release website.


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