AB–InBev and DoJ close to a settlement

The U.S. Department of Justice (DOJ) and AB–InBev jointly requested on 5 April 2013 that a stay in their legal fight be extended to 23 April 213. However, they said they had reached the framework of an agreement to settle.

The DOJ had filed a lawsuit on 31 January this year to stop AB–InBev, the world’s major brewer, from buying the 50 percent of Mexico’s Grupo Modelo it does not already own for USD 20.1 billion, saying that it would seriously hamper competition in the U.S. beer market, where AB–InBev and Miller Coors already control close to 80 percent.

However, the most recent statement indicates that AB–InBev’s Plan B – to sell Modelo’s Piedras Negras brewery in Mexico near the U.S. border to wine company Constellation for USD 2.9 billion plus the perpetual rights for the Corona brand and other Modelo brands in the U.S. – seems to have won the DOJ over.

If the DOJ and AB–InBev finalise an agreement, it will need to be approved by the court. The proposed transaction must also be approved by Mexico’s competition authorities.

The revised deal will make Constellation, whose wine labels include Robert Mondavi wines, the third largest U.S. beer company.