In creating the world’s biggest beer company, Anheuser-Busch InBev may need to let go of the planet’s best-selling beer: China’s Snow.
That’s among the probable outcomes Guotai Junan Securities Co anticipates in the wake of AB InBev’s agreement to buy SABMiller for $106 billion. Analysts at Goldman Sachs Group, BNP Paribas and Daiwa Capital Markets have also pointed out the likelihood of such a scenario in recent notes to clients.
The idea is that the merger would give the Belgian company about 40% of China’s beer market — too much for regulators’ comfort — and result in the disposal of a joint-venture stake back to China Resources Enterprise. SABMiller’s 49% stake in the venture, called China Resources Snow Breweries, could be worth about 600 billion yen, according to Nomura Holdings.
“Antitrust issues would be the biggest barrier for the purchase,” said Guotai Junan’s Andrew Song. “If the deal is completed, the combined market share of AB InBev and China Resources may trigger an antitrust review.”
Full content: The Wall Street Journal
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