InBeV asked to sell Labatt before acquiring Anheuser-Busch

The US department of justice has asked InBeV NV to sell its subsidiary Labatt USA before going ahead with plans to acquire Anheuser-Busch Companies Inc.

The justice department said that the originally proposed $52 billion acquistion would have led to higher prices for beer in Buffalo, Rochester and Syracuse in the New York metropolitan area, in view of the fact that Anheuser-Busch Budweiser brands and InBeVs's Labatt brands, including Labatt Blue and Labbatt Blue Light, are the two biggest sellilng beer brands there.

The original transaction would have eliminated competition resulting in higher prices to beer drinkers in the metropolitan areas, it said.

The proposed settlement would require InBeV to sell Labatt USA and grant a licence to the acuquirer to sell Labatt brand beer for consumption throughout the US. Additionally, it requires the department's antitrust divsion to approve the transaction and ensure that competition for beer sales in Buffalo, Rochester and Syracuse is not affected to the purchase of Anheuser-Busch by InBev.

InBeV and Anheuser-Busch do not compete in most of markets across the US with InBev accounting for less than 2 per cent of beer sales. However, in the Buffalo, Rochester and Syracuse, InBeV's Labatt beer brands enjoy a significant share of the market.