Brazil's main antitrust regulator should approve the merger of AmBev and Belgium's Interbrew, which would create the world's largest brewer, a competition watchdog said on June 29, according to Reuters. The deal would not compromise competition in the Brazilian beer market, the Justice Ministry's Economic Rights Secretariat (SDE) said in a statement.

The watchdog recommended that the Administrative Council of Economic Defense, the antitrust regulator known as Cade, approve the $11.5 billion deal without conditions. Cade President Joao Grandino Rodas in May said the merger appeared to pose no competition threat in Brazil as Interbrew's share of the beer market was very small.

Interbrew and Companhia de Bebidas das Americas (AmBev) said in March they would merge operations to create InterbrewAmbev, the world's No.1 brewer by volume, surpassing Anheuser-Busch Cos. Inc. (BUD.N: Quote, Profile, Research) .

Schincariol, Brazil's No.2 brewer, filed a request with Brazilian antitrust authorities asking them to suspend the deal because it would hurt competition in Brazil.

AmBev controls about two-thirds of the Brazilian beer market. Its main rivals are privately owned Schincariol and Kaiser, which is owned by Canadian brewer Molson Inc. AmBev's shares closed 0.2 percent higher at 612.50 reais in Brazil. The country's benchmark Bovespa stock gained 2.2 percent during the session.

02 July, 2004