In an increasingly competitive global business environment, corporate mergers have become a strategic tool for growth, efficiency, market diversification, and leadership consolidation. A high-impact example was the merger between brewing giants Anheuser-Busch InBev and SABMiller—an operation that not only reshaped the global beer industry but also had direct implications in countries like Ecuador.

What Is a Corporate Merger?

A merger is the voluntary combination of two or more companies that agree to integrate their operations, resources, and legal structures in order to function as a single entity. In practice, one company may absorb the other (merger by absorption), or both may create a new company (merger by integration).

The main goal of a merger is to achieve synergies—to generate joint value that the companies could not attain independently. Mergers can take place between companies in the same industry (horizontal mergers), at different stages of the value chain (vertical mergers), or across unrelated industries (conglomerate mergers).

Why Carry Out a Merger?

There are multiple strategic and economic reasons for executing a merger:

• To expand into new markets or regions
• To reduce operating costs through economies of scale
• To increase bargaining power with suppliers or clients
• To access new technologies, brands, or human capital
• To enhance competitiveness and better face rivals
• To diversify the product or service portfolio

Steps in the Merger Process

Although the steps may vary depending on the country and applicable legislation, common stages in a merger process include:

1. Strategic analysis and due diligence: Assessing risks, assets, liabilities, contracts, and legal structure.

2. Negotiation of terms: Company valuation, corporate structuring, and final agreement drafting.

3. Internal approvals: Approval by boards of directors and shareholders' meetings.

4. Regulatory notification and approval: Submitting the merger to competition or antitrust authorities.

5. Operational and administrative integration: Merging teams, systems, brands, and processes.

Featured Case: The AB InBev–SABMiller Merger and Its Impact on Ecuador

The merger between Anheuser-Busch InBev (AB InBev) and SABMiller in July 2016 was one of the largest corporate transactions of the 21st century. That month, AB InBev—the Belgian-Brazilian multinational and the world’s largest brewing company—completed the acquisition of its main competitor, SABMiller, for a reported value of US$107 billion, according to The Wall Street Journal and Financial Times.

The deal led to the consolidation of a global brewing empire with over 500 brands in more than 100 countries, generating annual sales exceeding US$64 billion.

Who were the parties involved in the transaction?

1. Buyer: AB InBev

2. Seller: SABMiller

3. Legal and Financial Advisors:
   Lazard, Goldman Sachs, J.P. Morgan, Freshfields Bruckhaus Deringer, among others.

4. Key Regulatory Authorities:

   • European Commission, U.S. Department of Justice, and antitrust authorities in over 20 countries, including Ecuador.

In Ecuador, the merger had a direct impact on the local beer market, as both companies had significant operations in the country. According to ElComercio.com, the Superintendence for Market Power Control (SCPM) approved the merger subject to 11 specific conditions aimed at preventing monopolistic practices and protecting Ecuadorian consumers. Among the commitments undertaken by AB InBev were:

1. Strengthening the training program for shopkeepers and retail points operated by Cervecería Nacional.
2. Promoting domestic barley production to reduce dependence on imported raw materials.
3. Maintaining agreements with local suppliers without engaging in abusive exclusivity practices.
4. Supporting social and economic development programs in areas such as tourism, sports, and rural sustainability.
5. Periodic monitoring by the SCPM, with the possibility of sanctions in case of non-compliance.

Impact in Ecuador

En Ecuador, SABMiller controlaba la Cervecería Nacional (CN), mientras que AB InBev no tenía presencia directa, pero tras la fusión pasó a dominar el 95% del mercado cervecero ecuatoriano, según la Superintendencia de Control del Poder de Mercado (SCPM).

The SCPM approved the transaction in November 2016, subject to 11 specific conditions aimed at preventing abuse of dominant market position and protecting consumer rights and free competition.

This case serves as a clear example of how a global merger must be adapted to local regulatory frameworks. Although the transaction was structured in Brussels, New York, and London, its implementation required country-by-country negotiations and adjustments, in compliance with principles of fair competition and consumer protection.

In Ecuador, the intervention of the SCPM was essential to ensure fair market conditions, transparency in the process, and a clear commitment to local development. For companies with international expansion goals, this case highlights the importance of legal and strategic advisory services in cross-border mergers and acquisitions, especially when navigating complex regulatory environments and potential economic concentration risks.

Expert Advisory

Are you considering a merger or acquisition with cross-border implications?

It’s essential to understand that international experience shows success depends not only on the business itself, but on how well it adapts to each legal and regulatory framework.

That’s why it’s critical to have the support of experienced professionals who can guide you through every step of the process.

We invite you to contact ILP Global – Gallegos, Valarezo & Neira, our expert partners in Ecuador, for tailored legal and strategic advice.