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UPDATE 1-South Africa says SABMiller takeover by AB InBev should comply with conditions
October 15, 2015 / 4:17 PM / in 2 years

UPDATE 1-South Africa says SABMiller takeover by AB InBev should comply with conditions

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JOHANNESBURG, Oct 15 (Reuters) - The planned takeover of SABMiller by Anheuser-Busch InBev should comply with conditions imposed by South Africa on SABMiller when it relocated its head office to Britain in 1999, South Africa’s National Treasury said on Thursday.

SABMiller, which on Tuesday agreed in principle to an offer worth more than $100 billion from its larger rival, traces its roots back to South Africa 120 years ago, when it began selling beer in the gold-prospecting fields around Johannesburg.

Before relocating its head office to London in 1999, South African exchange control authorities required SABMiller, like other companies such Old Mutual and Anglo American which made similar transitions, to prove its assets would not be affected by the move.

Other conditions include that all the South African operations and assets of the company will remain in South Africa, and that the company would match dividends paid to the foreign holding company with dividends paid to South African shareholders, in order to maintain balance-of-payments neutrality.

A senior treasury official said on Tuesday the department was watching the merger for signs of any tax erosion.

The Congress of South African Trade Unions (COSATU), an alliance partner of the ruling African National Congress, said on Wednesday it opposes the deal. (Reporting by Tiisetso Motsoeneng and TJ Strydom; Editing by James Macharia and David Holmes)

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