OFT clears $52bn Anheuser-Busch acquisition by InBev

LONDON - The Office of Fair Trading (OFT) has today cleared the takeover of Budweiser brewer Anheuser-Busch by Stella Artois brand-owner InBev.

The deal is worth $52bn (£35bn), making it the biggest all-cash acquisition in corporate history.

The most significant addition to the InBev portfolio is Budweiser. InBev is already the UK's leading premium lager supplier, with the Artois brands and Beck's, and second-biggest in overall lager sales in the domestic market.

Having scrutinised the deal, the OFT said it had no concerns regarding the off-trade channel, despite InBev accounting for 40% or more of premium lager sales. The OFT reviewed evidence, including existing Anheuser surveys of the preferences of UK buyers of Budweiser, which demonstrated it would not be profitable to raise off-trade prices of any of the two parties' brands. The OFT was satisfied the evidence showed that few consumers would rank both brands as their top two choices, so they are not close competitors.

It claimed that retail chains, who were not concerned by the merger, could easily attract sales by switching to competing premium lagers such as Kronenbourg 1664, Carlsberg Export, Heineken, Grolsch, Peroni and Miller Genuine Draft, which would keep InBev's pricing in check post-merger.

The OFT's preliminary concerns focused on the on-trade channel, where InBev would account for more than half of all premium lager sales following the merger. Stella Artois is the leading premium draught lager, while Budweiser is the leading premium bottled lager, with Beck's as number two in bottle sales.

However, only a fraction of on-trade sales of premium lager are in bottles, and the OFT concluded that bottled Budweiser does not act as a significant pricing constraint on draught Stella Artois, whose primary competitors are other premium and standard draught beers sold in large volumes.


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