No involuntary job losses ever as Anheuser-Busch InBev gets South African Government backing

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Anheuser-Busch InBev has taken a major step towards securing South African clearance for its takeover of SABMiller.

Following the extension by South Africa's competition commission last week of its review of the transaction, AB InBev said today that it has received agreement from the Government for a package of commitments in the country. The agreement will hasten the commission's review, according to the brewer.

As part of the package, AB InBev has pledged to ensure there will be no "involuntary job losses" in the country at any point in the future. The company will also maintain the current permanent employment levels in SA for five years after the purchase completes.

Other commitments relate to SAB's share scheme for black South Africans, as well as a ZAR1bn (US$68.3m) investment in small-holder farms in the country. The country's current net import of barley will subsequently become a net export of malt, the processed form of grain used in brewing.

AB InBev set up a secondary listing on the Johannesburg Stock Exchange in in January, in a move designed to "demonstrate (its) commitment" to the African content.

"South African Breweries – the SABMiller predecessor - has been an important company in the South African economy for many years," said SA's Minister of Economic Development Ebrahim Patel. "This transaction is by far the largest yet to be considered by the competition authorities and it is important that South Africans know that the takeover of a local iconic company will bring tangible benefits."

CEO Carlos Brito added: "As we have stated from the outset, we are excited about the growth opportunities and the role South Africa will play in our combined business. Recognising South African Breweries' important contributions to South Africa's economy and society, our commitments seek to build on this deep heritage.

"We believe there is a huge amount that the two companies can achieve together to the benefit of all stakeholders."

The agreement will be highlighted to SA's competition commission "for consideration as part of its assessment of the competition and public interest impact of the proposed acquisition", AB InBev said.

When the brewer announced its acquisition of SAB last year, AB InBev noted that regulatory clearances in the EU, US, South Africa and China were preconditions to offer, while other necessary clearances included authorities in Colombia, Ecuador, Australia, India and Canada. The company received regulatory clearance in India in February.

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