South Africa extends regulatory scrutiny of SAB, AB InBev for fifth time

By Nqobile Dludla

JOHANNESBURG (Reuters) - South Africa's competition watchdog was on Thursday granted an extra five days to study Anheuser-Busch InBev's (ABI.BR) planned $106 billion (73 billion pound) takeover of SABMiller (SAB.L) - a fifth extension that could delay the consumer industry's biggest ever deal.

"There are several outstanding issues that should be considered. The merging parties are aware of these issues, and hence they have consented to the extension," Competition Commision spokesman Itumeleng Lesofe told Reuters.

The Commission was due to finish its investigation on Thursday, after it was granted a 15-day extension. It has already extended the deadline four times.

The new deadline expires on May 12.

Drawn-out scrutiny by the South African regulator could frustrate the Budweiser brewer's goal of completing the acquisition in the second half of 2016 and delay reaping the financial benefits of combining the world's No.1 and 2 brewers.

Lesofe declined to elaborate on the Commission's concerns but said an additional five days might not be enough to address the outstanding issues.

In a bid to fast-track the regulatory probe of the deal, AB InBev, struck a deal with the South African government that included investing $66 million to support small farmers and freeze layoffs for five years.

South Africa has a history of taking its time over approving takeovers partly because competition authorities have a public interest mandate to safeguard jobs, in addition to an anti-trust mandate to protect competition.

In 2011, the regulator told U.S. retailer Wal-Mart Stores (WMT.N) not to cut jobs for two years following its acquisition of South African retailer Massmart (MSMJ.J), delaying implementation of the $2.4 billion deal by at least two months.

The Commission investigates deals for any anti-trust issues and submits its views to the Competition Tribunal, which makes a final ruling on whether a deal should go ahead.

Since the deal was announced in November, AB InBev has completed a secondary listing on the Johannesburg Stock Exchange, lined up debt financing and addressed anti-trust concerns in the United States, Europe and China with proposed asset sales.

AB InBev still has to secure antitrust clearance in Europe, where both it and its target are headquartered. The European Commission has said it will give its verdict on the deal on May 24.

Australia's antitrust regulator on Thursday cleared the deal, saying the transaction would not adversely affect the domestic market.

(Reporting by Nqobile Dludla; Editing by Tiisetso Motsoeneng and Alexandra Hudson)