AB InBev: Agreement in Principle Reached With DOJ on Modelo
Parties request stay of proceedings extension until April 23
LEUVEN, Belgium -- Anheuser-Busch InBev, Grupo Modelo SAB de CV, Constellation Brands Inc. and Crown Imports LLC have reached an agreement in principle with the U.S. Department of Justice on a proposed resolution to the Justice Department's litigation challenging AB InBev's proposed $20.1 billion acquisition of the remaining stake in Grupo Modelo that it does not already own.
The proposed resolution is substantially in line with the revised transaction announced on Feb. 14, 2013, AB InBev said.
The world's largest brewer has been trying since June to buy the half of Grupo Modelo that it does not already own, and the Justice Department sued to block the deal on concerns that it would stifle competition in the United States, reported the Associated Press.
In an effort to appease regulators, AB InBev subsequently struck a side deal that gives control of the production of Corona and other Modelo beers sold in the United States to smaller competitor Constellation Brands Inc.
The companies involved in the series of deals have since been in talks with the Department of Justice about a possible resolution.
In connection with this agreement, the parties and the Justice Department have jointly approached the court and requested an extension of the stay of the proceedings until April 23, 2013.
This stay will allow the parties to finalize the details of a proposed consent judgment and the related definitive agreements and papers required for settlement. The parties stated in their filing with the court that they expect for this to be their final request to extend the stay. Approval of the transaction, and the timing of such action, remain subject to the finalizing of the relevant documentation with the Justice Department and other parties, and approval by the court.
The revised transaction with Constellation remains subject to regulatory approval in Mexico.
Leuven, Belgium-based Anheuser-Busch InBev is the leading global brewer, one of the world's top five consumer products companies. It has a portfolio of more than 200 beer brands, including Budweiser, Stella Artois and Beck's, alongside Leffe, Hoegaarden, Bud Light, Skol, Brahma, Antarctica, Quilmes, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, Hasseroder and Jupiler. It also owns a 50% equity interest in the operating subsidiary of Grupo Modelo, Mexico's leading brewer and owner of the global Corona brand. In 2012, AB InBev realized $39.8 billion in revenue.