US regulators seek more concessions in $20.1 bn Anheuser-Busch-Grupo Modelo deal
19 Jan 2013
US antitrust regulators are seeking more concessions from Anheuser-Busch Inbev SA in order to approve its $20.1 billion deal to buy the remaining half of Mexican brewer Grupo Modelo, Reuters yesterday reported, citing a source close to the developments.
The report said the US Department of Justice (DoJ) has shifted into high gear in recent weeks as it looks at the plan by the world's largest brewer to buy out Modelo.
In June 2012, Leuven, Belgium-based Anheuser-Busch, which holds a 50-per cent non-controlling stake in Modelo, had offered to buy the remaining of the Mexican Corona beer maker for $20.1 billion. (See: Anheuser-Busch InBev to buy remaining Modelo stake for $20.1 bn)
Analysts had earlier said that Anheuser-Busch InBev might have to sell off assets to ward off anti-trust concerns since it already holds nearly half of the US beer market.
In order to ease antitrust concerns, AB InBev, the owner of Budweiser and Stella Artois beers, had agreed to sell Modelo's 50 per cent stake in Crown Imports, the joint venture that imports and markets Grupo Modelo's brands in the US, to Constellation Brands for $1.85 billion, giving Constellation Brands 100 per cent ownership of the JV.
As a result, Grupo Modelo's brands will continue to be imported, marketed and distributed independently in the US through Crown Imports on the existing financial terms, while Anheuser-Busch InBev will continue to supply Modelo's beer brands.
Reuters reported that antitrust experts had expected the DoJ to focus on the supply agreement, but a source told the news agency that the government wanted to go further because the sector is so concentrated.
