China's Ministry of Commerce (MOC) approved InBev's buyout of the U.S. company, Anheuser-Busch Cos. (A-B), saying the merger will not damage competition in the Chinese beer market.

"The MOC decided not to prohibit the merger as it will not limit competition in the Chinese market in terms of regions and products," the statement said.

The MOC did restrict the two companies from increasing their existing stake in Chinese beer makers in order to "reduce the negative impact on future competition in the domestic market".

A-B cannot boost its 27 percent share in Tsingtao Brewer Co. and the Belgian brewer cannot increase its existing 28.56 percent stake in Zhujiang Beer.

The MOC also demanded that InBev not seek shares of China Resources Snow Breweries and the Yanjing Beer Group, the other two major players in the Chinese beer market.

InBev must also report to the ministry if any changes are made to the new company's structure of controlling shareholders.

The ministry made its decision after inquiring into the acquisition according to the 27th item in Chinese anti-trust law. The MOC has also solicited opinions from related authorities, industrial associations and competitors in the same industry.

InBev announced its bid to acquire all stake of A-B for a total of 52 billion U.S. dollars, or 70 U.S. dollar per share. If successful, the merger would create the world's largest brewery by sales and effectively help InBev boost its share of the American market.

The deals won approval from A-B shareholders and China, but still needs nods from the United States and Britain.

InBev and A-B are required by Chinese anti-trust law to report to the ministry for approval on the transaction as their 2007 revenue in China hit 5.8 billion yuan (852 million U.S. dollars) and 4.5 billion yuan respectively, well above the reporting threshold. InBev sent the application to the MOC on Sept. 10, 2008.

(Xinhua News Agency November 19, 2008)