TheChek News Flow

We spoke to our ABI source who noted that the MOFCOM approval should be forthcoming by next week. There are no outstanding issues with MOFCOM and MOFCOM have largely completed their review of the transaction and were awaiting the announcement of the EC decision (received on 24 May) to ensure that there would be no conditions relating to China.

The DOJ are in the final stages of their review and an approval is imminent and expected within the next ten days. The DOJ may require some concessions aimed at protecting the interest of smaller craft brewers and their ability to distribute their products and the monitoring of wholesaler programs could also be possible. An agreement may include something similar to what has been agreed in South Africa, with the merged entity agreeing to ensure that a certain percentage of their fridge space is devoted solely to craft brewers for a certain period of time or in perpetuity.

The South African Competition Tribunal have to set a pre-hearing date within 10 days and thus a hearing date should be set by 10 June at the latest. Given that the transaction is unopposed, we do not expect any third party intervenors and thus the pre-hearing process should be very quick and conclude within a day or two. If the pre-hearing process is short and there are no third party intervenors, the Tribunal will not need to set a formal hearing date. Given the comprehensive nature of the Competition Commission's review, it is highly unlikely that the Competition Tribunal will have to undertake any further investigative review of the transaction and therefore we expect the Competition Tribunal approval relatively shortly following the pre-hearing. According to our ABI source, the Competition Tribunal hearings could take place on either 9 or 16 June and as per the Competition Tribunal website, these two dates are currently free and no hearings have yet been scheduled.

Once the final pre-conditional approval has been received (likely to be South Africa), the parties can dispatch the Scheme Documentation to SAB shareholders. Under the Takeover Panel rules, SAB and ABI have 28 days to dispatch the documentation, however, given the length of time required to obtain the pre-conditional approvals, we believe that the documentation should be ready to dispatch to shareholders fairly promptly after the receipt of the final approval i.e. by mid/late June. As the shareholder meetings cannot take place until 21 calendar days following the dispatch of the Scheme Documentation at the earliest, the SAB shareholder meeting will be held by early/mid July. Assuming that SAB and ABI have managed to secure court dates and that the remaining regulatory approvals have been received by the SAB shareholder meeting, the court meeting to sanction the Scheme could take place fairly promptly (one or two days) following the approval of the Scheme by SAB shareholders. Therefore, the transaction could be in a position to be fully completed by the end of July ahead of the 12 August payment date for SAB shareholders to receive the dividend.