Brito also stated that the purpose of the transaction was to enhance the ability of the company to service new markets, particularly those in Africa, South and Central America and Asia. A hearing of the Senate Judiciary Committee was called on Tuesday to examine how the merger resulting in an entity representing about 50% of the industrys profit and nearly a third of all beer sold globally would impact the industry. In 24 out of 30 largest global beer markets, the combined company will be holding theNo.1 or 2 positions.
The megamerger is expected to open up new markets for InBev; it would not help boost the market position for the company in the US. To ensure that 58% stake SAB Miller is holding in MillerCoor is being sold to the joint venture partner Molson Coors Brewing Co. at $12 billion subject to approval by the US Justice Department.
Brito also stated that the purpose of the transaction was to enhance the ability of the company to service new markets, particularly those in Africa, South and Central America and Asia. He added further that the divestment of the interest SAB Miller has in MillerCoor will only create a more competitive marketplace, building upon what has already come to be a golden age in consumer choice in the history of American brewing.
Brito added further that the merger, apart from not impacting the competition in the US beer industry, would only boost the ability of Molson Coor to operate.
According to Senator Richard Blumenthal, a Democrat from Connecticut, consolidation of brewers in the past few years has given rise to “beer behemoths” harming consumers. InBev’s merger, he added should be viewed with “a high degree of skepticism”. He went on to say that from a consumer’s point of view the result of these mergers has been one of higher prices though it could have been good for shareholders of the respective companies. Read more…