Beer Merger: AB In Bev’s South Africa Pact Assures Zero Job Cuts


The mega-merger between beer giants Anheuser-Busch InBev (AB InBev) and rival SABMiller may clear the South Africa scrutiny after assurances were made that no jobs will be cut and farmers will be supported. The $108 billion merger deal has a July deadline.

On Thursday, an agreement was signed between the South African government and AB InBev on jobs and development fund of one billion rands (AU$89 million).

The deal makes a firm commitment that at no point in the future will there be job losses as a result of the merger deal, reports News Express. AB InBev committed that total employment levels will be maintained in SA.

The proceeds of the development fund will be used for supporting smallholder farmers and also back campaigns for reducing harmful use of alcohol.

Economic Development Minister Ebrahim Patel said the agreement will guarantee that the takeover of a local company will bring tangible benefits.

“We engaged with AB InBev to identify commitments that can ensure the transaction has a net benefit for the country.”

Carlos Brito, CEO of AB InBev welcomed the agreement and said: “Our commitments seek to build on (South African Breweries’) deep heritage and we believe there is a huge amount the two companies can achieve together to the benefit of all stakeholders.”

Thanks to the agreement, the approval from the Competition Tribunal will be expedited before the extended deadline of May 5.

An AB InBev spokeswoman said the company is confident that the Competition Commission will not delay the global timetable for clearing the combination.

The expected adverse intervention of the Food and Allied Workers Union (Fawu) at the Tribunal has been nullified by the generous commitment offered in the agreement for job protection.

Earlier, South Africa had taken a hard stand against the merger’s clauses.

According to a spokesman for South Africa’s Competition Commission the regulator had “communicated the concerns to the merging parties and needs more time to engage with the parties in order to find solutions to the said concerns.”

Besides South Africa, AB InBev has to get the regulatory nod from the US, Europe, and other markets, reports The Wall Street Journal.


To Top