Mike Snider

USA TODAY

Big Beer is set to get bigger.

The Justice Department's antitrust officials have approved Anheuser-Busch InBev's $107 billion acquisition of competitor SABMiller.

To gain U.S. regulator's approval of the so-called Megabrew deal, Belgium-based AB InBev has agreed to sell its SABMiller's U.S. business, which will allow Molson Coors to sell beers such as Miller Lite and Miller High Life in the U.S.

AB InBev must also seek DOJ review of any future acquisitions of beer distributors or craft beer brands. Another condition prevents AB InBev from running incentive programs that encourage independent distributors to not sell imports or craft beers made by competitors.

“The remedy we secured will help preserve and promote competition in the multi-billion dollar U.S. beer industry,” said Deputy Assistant Attorney General Sonia Pfaffenroth of the Justice Department’s Antitrust Division in a statement.

Molson Coors will pay $12 billion to acquire AB InBev's 58% stake in MillerCoors and will make and sell Miller Light, the No. 4-selling beer in the U.S., as well as No. 2 seller Coors Light, in the U.S., and will have the rights to the Miller brand outside the U.S.

As a result, the two largest U.S. brewers, Anheuser-Busch and MillerCoors, will "now remain independent competitors (in the U.S.) after the deal," Pfaffenroth said. "The settlement also preserves the ability of smaller brewers – including brewers of craft and import beers – to compete against (AB InBev) by protecting their access to important distribution networks. Independent distributors that sell ABI’s beer will have the freedom to sell and promote the variety of beers that many Americans drink.”

AB InBev expects to close the deal in the second half of 2016. “With today’s agreement, we have taken a significant step forward on the transaction, which will create the world’s first truly global brewer,” said AB InBev CEO Carlos Brito in a statement. “Our combination with SABMiller will bring more choice to more beer drinkers—and extend the global reach of our iconic American brands, such as Budweiser—in markets outside of the U.S.”

Beer stocks rose along with the news. Shares of AB InBev (BUD) closed Wednesday at $126.22, up 1.3%; SABMiller (SBMRY) up 0.4% to $58.46. Molson Coors (TAP) also rose 2.8% to $100.80.

Before the deal, AB InBev, the No. 1 global brewer had about 21% of the world's beer market, says Caroline Levy, managing director, U.S. equity research for independent brokerage and investment group CLSA. Its acquisition of London-based SAB Miller, the No. 2 brewer, will increase that global share to 28%

"They increased their scale and beer is a scale business," she said. "They are buying extremely profitable businesses in Colombia and Peru and South Africa ... (and) the growth opportunity in Africa, called sort of the last frontier for (a) real per capita or premium-ization opportunity."

The two global beer giants reached a deal in November 2015 to merge and have been seeking antitrust approval from regulators across the globe. AB InBev had proposed the sale of SABMiller's stake in MillerCoors as part of the deal.

Budweiser maker Anheuser-Busch InBev reaches $107B deal for SABMiller

AB InBev says it has now has approval in 21 jurisdictions. Most recently, the brewers got approval last month from South Africa’s Competition Commission on the condition that it sell SABMiller’s stake in liquor maker Distell Group and invest invest 1 billion rand ($68 million) in local agriculture and other development.

Having successfully gotten U.S. approval, AB InBev's last hurdle is approval in China, where it has agreed to sell SABMiller’s stake in China’s Snow Breweries to the state-backed China Resources Beer Co. for $1.6 billion.

AB InBev's beer portfolio includes Bud Light, the top-selling beer in the U.S., Budweiser, Busch, Michelob, Natural Light, Stella Artois, Shock Top, Goose Island and Beck’s. SABMiller's brands include Peroni, Grolsch and Pilsner Urquell. Molson Coors will have the rights to sell those beers in the U.S.

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