Interbrew wins EC go-ahead for acquisition of Beck's

Belgian beer giant Interbrew has won the European Commission's approval for its £1.2bn cash acquisition of Beck's.

The EU had expressed concerns over the deal because Interbrew will own both the Stella Artois and Beck's brands, and possibly gain an unfair advantage in the premium beer market as a result.

But the Commission said it had cleared the deal after examining the situation in Britain, Belgium, the Netherlands and Italy.

The deal will boost Interbrew's position against Dutch rival Heineken in the lucrative American premium market.

Beck's is sold in 120 countries and is Germany's leading beer export. The deal is also expected to give Interbrew a head start in an eventual consolidation of the fragmented German market.

At the moment Scottish & Newcastle (S&N), Britain's largest brewer, currently produces Beck's in Britain under licence, and pays royalties on sales to the German Group.

The European Union's antitrust watchdog initially had feared Interbrew and S&N would co-ordinate prices in Britain because of their commanding control of the premium beer market.

The Belgian brewer immediately offered concessions in a bid to get the deal through. It is understood Interbrew will amend its agreement with S&N to remove any concerns in the British market. A block on the deal would have been a devastating blow to Interbrew. Following its £2.3bn acquisition of Bass Brewers last year, the company was forced to put Carling up for auction by the Department of Trade and Industry.

Heineken is thought to be the favourite to buy Carling with Anheuser-Busch and South African Breweries (SAB) also set to bid.