SABMiller-Molson Coors joint venture approved

By Diane Bartz

WASHINGTON (Reuters) - U.S. antitrust authorities have approved SABMiller's (SAB.L) plan to combine its U.S. operations, the country's second largest, with number-three Molson Coors Brewing (TAP.N), the Justice Department said on Thursday.

"After a thorough, eight-month investigation ... the division has determined that the proposed joint venture between Miller and Coors is not likely to lessen competition substantially," the Justice Department's Antitrust Division said in a statement.

The division found the joint venture was likely to produce "substantial and credible" savings that would cut the companies' costs of producing and distributing beer.

The companies said in a joint statement that they expected $500 million (250 million pounds) in annual savings.

"This combination will not only generate significant growth and cost synergies, but will also create tremendous opportunities for innovations," SABMiller Chief Executive Graham Mackay said in the statement.

Last October, SABMiller and Molson Coors said they would combine their U.S. operations to create a business that will have annual sales of $6.6 billion and be the second-largest U.S. market player behind Anheuser-Busch BUD.N.

Once the deal is completed, which is expected around June 30, Anheuser-Busch and the new SABMiller joint venture would control roughly 80 percent of the U.S. beer market.

The beer industry is experiencing a wave of consolidation.