Conditions attached to China’s approval of InBev’s acquisition of Anheuser-Busch (A-B) have raised fears that Beijing will use its new anti-monopoly legislation to protect domestic industry, the Financial Times reported. The US$52 billion brewery industry merger this month became the first to come under review since the new anti-monopoly law came into effect in August. The Ministry of Commerce waved the deal through on the grounds that it would not adversely affect competition in the domestic beer market, in which both InBev and A-B have significant interests. However, the ruling says that InBev cannot increase A-B’s 27% stake in Tsingtao Brewery or its own 28.5% stake in Zhujiang Brewery without government approval. Neither can it acquire shares in China Resources Snow or Beijing Yanjing, two other big domestic breweries, without Beijing’s say-so. Lawyers believe that the government’s decision to impose future conditions on a deal that did not harm competition will likely alter the approach of many overseas companies toward M&A in China.
For more on China’s new anti-monopoly law, read this article from the August issue of CER.