AB InBev purchase of SABMiller is finally approved; here are the important modifications

Man, remember when Anheuser-Busch InBev announced it was buying SABMiller for $100 billion back in 2016? Well the acquisition finally got approved like a week ago. United States District Court Judge Emmet Sullivan approved the merger by signing what’s called a Modified Final Judgment. Basically, the Department of Justice and ABI negotiated some modifications to the consent decree to try, in theory, to tame the ever-expanding girth of ABI.

A lot of the Modified Final Judgement had to do with distribution. The judgement made it more difficult for ABI to buy distributors, break or negotiate contracts with them, retaliate against wholesalers, require reporting about a distributor’s business or give incentives to those beer distributors. The judgment also comes with a “Monitoring Trustee,” who will have the authority to investigate complaints against the mega brewer.

Also, ABI isn’t supposed to complete any acquisitions of “a beer brewer, importer, distributor, or brand owner that derives more than $7.5 million in annual gross revenue from beer sold for further resale in the territory, or from license fees generated by such beer sales.” Let it be noted that since the Department of Justice filed its antitrust complaint in 2016, ABI has bought Wicked Weed Brewing Co., SpikedSeltzer and Virtue Cider (the remaining stake at least).

Twelve organizations and businesses filed responses — from the Brewers Association and the National Beer Wholesalers Association to Yuengling and Ninkasi Brewing.

The consent decree will expire in eight years (10 years overall, from 2016), but it could also be terminated in five if the Department of Justice concludes it’s no longer in the best interest of the public. Now that all these safeguards have been put in place, we can all rest easy, right? Probably not. From Brewbound:

Nevertheless, now that the consent decree is officially signed, sources with knowledge of A-B InBev’s business who spoke to Brewbound believe the company could once again become a more active dealmaker for both breweries and distributors.

ABI now controls between 45 to 50 percent beer market share in America, but the company does not own rights to distribute SABMiller products in the United States. Molson Coors owns those rights in America via its American subsidiary MillerCoors. SABMiller sold its share in MillerCoors for $12 billion back in 2016 in order to get this deal done.