April 10

AFTER EXTRACTING A POUND OF FLESH, THE DOJ IS SET TO DROP ITS CHALLENGE TO THE ANHEUSER-BUSCH INBEV/ GRUPO MODELO TRANSACTION

Glass of beer isolated on a white background

On Friday, April 5, 2013, Anhueser-Busch Inbev (“ABI”) announced that it had reached an “agreement in principle” with the U.S. Department of Justice in connection with its planned acquisition of the remaining 50% of Grupo Modelo that it does not already own. The announcement did not provide details but said that the “proposed resolution is substantially in line with the revised transaction announced on February 14, 2013.

Under the revised terms announced on February 14, 2013, Grupo Modelo’s U.S. business is transferred to Crown Imports, a fully-owned entity of Constellation Brands, Inc. by providing licenses in perpetuity to the Grupo Modelo brands in the U.S. and a state-of-the-art brewery located in Mexico, close to the U.S. border, for the price of $2.9 billion, subject to a post-closing adjustment.

January 31

IS ANHEUSER-BUSCH’S PLAN TO MERGE WITH GRUPO MODELO ANTICOMPETITIVE?

The Department of Justice thinks so. It filed suit today (Jan. 31, 2013) to prevent consummation of the planned merger, which was announced June 29, 2012.

The D.O.J. argues that Anheuser-Busch’s acquisition of the remaining 50% share of Modelo that it does not currently own would “substantially lessen competition” and would have “anticompetitive effects” in violation of the Clayton Act § 7, 15 U.S.C. § 18.