The EU has approved Interbrew's acquisition of Beck's, deciding there are no competitive concerns. It's good news for Interbrew, which really didn't need a repeat of the Bass debacle. While the EU was concerned that Interbrew would own the top two premium beer brands in the UK, an unspecified amendment to the licensing agreement with S&N has placated the regulator. Now Interbrew is free to enjoy the benefits of a well-timed acquisition. Interbrew can breathe a sigh of relief. After a year of regulatory uncertainty concerning its Bass acquisition, it looked like the same thing was going to happen all over again. The Belgian beer giant's ambitious expansion plans are under constant review, but this time the EU is letting them through without a hitch.

The European Commission has cleared Interbrew's acquisition of Braueri Beck & Co after examining the potential effects in Britain, Belgium, the Netherlands and Italy. "While these two companies have overlapping activities in Europe in the production and supply of beer, in particular premium lager, the transaction does not raise any competition concerns," the commission said.

The antitrust watchdog was concerned that Interbrew's ownership of two of the UK's top-selling premium beers, Stella Artois and Beck's, might provide it with excessive monopoly power or lead to duopolistic behavior with its rival Scottish & Newcastle. S&N holds distribution rights for Beck's until 2012, but without this agreement Interbrew would have 40% if the UK premium beer market to itself. There were concerns over possible collusion and price fixing between the two companies so Interbrew made an unspecified amendment to the agreement that removed such concerns.

The Beck acquisition should prove useful to Interbrew across the board, with particularly strong sales in the US and Italy, but it is the advantage in the German market that is most interesting. Interbrew had previously shunned the German market, claiming it was too fragmented, but since then it has changed its mind. Consolidation has increased, while Interbrew's Dutch rival Heineken has made moves into the country.

As the first major multinational to buy a big German brewer, Interbrew seems to have bought itself the first-mover advantage. Brauerai Beck holds premium lagers and specialty beers that are already popular in Germany (and the potentially huge US market), and Interbrew has an established reputation for growing smaller brands. It looks like a promising position to be in.

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