Competition Commission's further extension application puzzles analysts
The brewer approached the competition authorities on 14 December 2015. In terms of the Competition Act, the commission is given 40 working days to make a decision on mergers.
Extensions are granted by the Competition Tribunal, which has granted four. The latest deadline had been set for 12 May. The commission has already warned it may not make the date.
"I really don't know what's delaying proceedings," said Sasfin Securities analyst David Shapiro. "We don't know where any of the complaints are coming from. As far as I know, AB InBev reached agreements with the government and unions that were key."
Shapiro said SA made it difficult for companies to invest in the country because of the vast number of rules and regulations. Walmart waited a year and a half to receive approval to take over Massmart. Shapiro said the competition authorities were sending negative messages to global investors.
The billion-dollar deal has received approval from authorities in Australia. It still needs the go-ahead from regulatory bodies in the US, China and Europe.
Meanwhile, Fitch has downgraded the brewer's long-term ratings by two notches. It said the company was being placed on ratings watch negative, pending completion of SABMiller's takeover. Fitch said it expects to affirm the current rating or to downgrade, based on postmerger debt positions and the new company's financial policy, "especially in regard to the pace of deleveraging".
Source: Business Day via I-Net Bridge