Thursday, September 17, 2015

Together, AB InBev and SABMiller would have more than 30% of the global market

Last year, the Belgian-Brazilian company controlled by 3 g Capital dominated 20.8% of the global market of beers by volume, while the anglo-South African rival held a 9.7 percent share, resulting in a combined presence of 30.5% of the world market, disregarded possible divestments required by antitrust authorities.
The Union would create a market leader with more than three times greater than the third placed overall, the Dutch Heineken, with a 9.1 percent slice of world Brewer consumption.
The deal, however, must face severe legal restrictions regarding market concentration in the main countries of operation of companies.
According to Euromonitor consulting, in the United States, the association between SABMiller and MillerCoors should be the target of antitrust inquiry. Other issue would be the conflict between SABMiller's partnership with Coca-Cola in Africa and Latin America, since the Ambev has a similar agreement with PepsiCo in Brazil.  
A gain for companies, on the other hand, according to Euromonitor, will be the regional advance. AB InBev would win market in the Middle East and Africa, while SABMiller would benefit rival's presence in Latin America.  
The senior analyst of alcoholic beverages of Euromonitor, Spiros Malandrakis, says however that the deal might mark the twilight of the big mergers and acquisitions in the brewing market.
"To the extent that the movement of craft breweries matures and solidifies its position as a disruptive force in the brewing market and strategic alcohol in General, consolidation between companies can offer any last drops of inebriation to the stock market, but will remain irrelevant to young people who seek alternatives to offerings of the big breweries," says the analyst. "Innovation and small scale trial will decide the future trajectories of growth", concludes Malandrakis. AB Inbev 20.8% 9.7% Heineken, SABMiller 9.1%, 6.1%, China Resources Carlsberg 6%, 4.7%, Molson Coors Tsingtao 3.2%, Beijing Yanjing 2.8% 2.3%, Kirin, Asahi Group 1.2%
Source: Euromonitor
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