Antitrust agreement clears way for merger
Anheuser-Busch InBev, the largest brewer in the US, agreed on Friday to sell the US rights to several foreign brands, including the top-trading Corona, in a deal that regulators say will ensure competition in beer prices.
The settlement of the US Justice Department's antitrust lawsuit means Anheuser-Busch InBev, which controls 39 per cent of the US beer market, can go ahead with its $US20.1 billion takeover of Grupo Modelo of Mexico, the brewer of Corona.
As part of the agreement, however, Anheuser will sell Modelo's 50 per cent stake in Crown Imports, which distributes Corona and other Modelo brands in the United States, to Constellation Brands, which already owned the other half.
For US consumers, the agreement will help keep beer prices down, government officials say, although there will be little practical effect on what beer buyers will see when they go shopping.
"This is a $US80 billion market," said William Baer, an assistant attorney-general who oversees the Justice Department's antitrust division. "Even a 1 per cent price change would cost consumers $US1 billion a year. This agreement will help to keep the market competitive, dynamic and quite healthy."
The department's antitrust division filed a lawsuit in January to block the merger. The government's opposition was a big blow to Anheuser-Busch InBev, which saw the acquisition as vital to its push to expand in Mexico and the rest of Latin America. In February, the two sides announced they were in talks to resolve the antitrust concerns.
"Ultimately, nothing will change for consumers in the US as a result of this transaction," said Laura Vallis, a spokeswoman for Anheuser-Busch InBev. "The proposed combination with Grupo Modelo has always been about Mexico, and making Corona more global in markets other than the US."
Constellation will pay $US5.5 billion for Modelo's share of Crown and for the Piedras Negras brewery, a new production and bottling plant in Mexico near the border.
Rob Sands, president and chief executive of Constellation, called the deal "the most transformational event in the history of our 68-year-old company".
Anheuser-Busch InBev is itself the result of a $US52 billion merger in 2008 between the maker of Budweiser and a Belgian-Brazilian brewer.
Corona is the top-selling imported beer in the US and the fifth-largest seller overall. Few imports to Europe, analysts say, have a greater potential for growth there.
Bud Light is the country's biggest seller.