Anheuser-Busch InBev Settles With DOJ

Settlement creates third largest beer maker

Anheuser-Busch InBev has reached a settlement with the Department of Justice over the beer maker's $20.1 billion deal to buy the remaining shares of Grupo Modelo, makers of Corona.

The DOJ filed suit against the deal in January because the combination of the largest and third largest beer makers would "substantially lessen competition" and result in consumers having to pay more for beer. 

To satisfy the government, ABI must must divest Modelo's entire U.S. business, including licenses of Modelo brand beers, its most advanced brewery, Piedras Negras, its interest in Crown Imports LLC and other assets to Constellation Brands, Inc.

"The companies' proposed merger would have reduced those two competitors to one – ABI. The proposed settlement announced today will create an independent, fully integrated and economically viable competitor to ABI," said Bill Baer, the assistant attorney general in charge of the DOJ's antitrust division. "This is a win for the $80 billion U.S. beer market and consumers. If this settlement makes just a one percent difference in prices, U.S. consumers will save almost $1 billion a year."

Following the divestiture, Constellation will become the third largest beer maker in the U.S. after ABI and MillerCoors. Brands that ABI must sell to Constellation include Corona Extra, Corona Light, Modelo Especial, Negra Modelo, Modelo Light, Pacifico, and Victoria, as well as three brands not yet offered in the U.S. but sold by Modelo in Mexico, Pacifico Light, Barrilioto and Leon.

The settlement, which still must receive court approval, is slightly revised from the one ABI and Modelo originally proposed to the DOJ.

Publish date: April 19, 2013 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT