Asahi wins conditional Australia nod for $11 billion AB InBev unit buy

(Reuters) - Japan's Asahi Group Holdings Ltd 2502.T won conditional approval from Australia's competition regulator for its $11 billion purchase of Anheuser-Busch InBev's ABI.BR domestic operations after agreeing to sell five beer and cider brands.

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Australia’s Competition and Consumer Commission (ACCC) said on Wednesday it has approved the deal after Asahi gave a court-enforceable undertaking to sell AB InBev’s Stella Artois and Beck’s beer brands and the Strongbow, Bonamy’s and Little Green cider brands.

An Asahi spokesman confirmed that the company agreed to the divestments for its planned purchase of Carlton & United Breweries (CUB).

It said that the company was awaiting approval of Australia’s Foreign Investment Review Board (FIRB), and the deal was still expected to close in the second quarter of 2020.

“We will continue to cooperate closely with authorities towards an FIRB approval,” the spokesman said.

The deal was originally set to close in the first quarter.

The decision by the world’s largest brewer to sell CUB last summer was driven by its need to cut its debt burden after it bought SABMiller in 2016.

“Without the sale of five beer and cider brands including Strongbow and Stella Artois, the combined Asahi-CUB company would have accounted for two thirds of cider sales in Australia, and owned the two largest cider brands, Somersby and Strongbow,” ACCC Chair Rod Sims said in a statement.

Also as part of the undertaking, Asahi will have to ensure the brands it sells get the same access to bars, pubs and clubs and off-premise space under tap-tying agreements as Asahi’s brands for the next three years, the ACCC said.

The ACCC also said it will need to approve the future buyer of the beer and cider brands.

Reporting by Nikhil Kurian Nainan in Bengaluru; Additional reporting by Ritsuko Ando in Tokyo; Editing by Shri Navaratnam and Muralikumar Anantharaman