Beer mega-merger faces DC gauntlet

Beer mega-merger faces DC gauntlet

The proposed merger between the world’s two largest beermakers is sure to raise red flags from regulators across the globe.

Anheuser-Busch InBev agreed Tuesday to buy chief rival SABMiller for as much as $106 billion, creating a beer giant that would be responsible for 30 percent of global beer production.

SABMiller rejected four previous offers from the maker of Budweiser before agreeing to the deal Tuesday.

The sale price of about $67 a share represents a 50-percent premium over the value of SAB’s stock before the deal was first announced, the companies noted. The first offer was for about $58 per share.

But the takeover is far from a sure thing, as the merger is sure to be scrutinized by U.S. regulators.

The Department of Justice (DOJ) and Federal Trade Commission (FTC) will both have to approve the deal in order for it to go through. The process could take months, and possibly years, to complete.

Both companies would file pre-merger notifications with the government, providing information about their businesses and the broader industry. The DOJ and FTC would then have 30 days to review the proposal.

After the government completes its review, it could accept the proposed merger, negotiate a new agreement between the two companies or challenge the deal in federal court. 

The merged company would likely be forced to sell off the MillerCoors brand in the U.S., which is a joint venture between SABMiller and Coors, industry experts suggest.