Anheuser-Busch InBev NV and the U.S. Justice Department said they have reached an agreement in principle to resolve an antitrust lawsuit seeking to block the brewer’s purchase of Grupo Modelo SAB, maker of Corona beer.
The parties filed a joint motion yesterday in Washington to postpone the suit until April 23 so they can complete the agreement. They had been scheduled to report to U.S. District Judge Richard Roberts by April 9 about progress toward a settlement or to set a litigation schedule. This is the third extension they have asked for since the Justice Department sued to block the merger Jan. 31.
“At this time, the parties have reached an agreement in principle on a resolution of this litigation based on the terms of the revised transaction,” AB InBev and the U.S. said in yesterday’s filing. “The parties request this additional stay so they may finalize the details of a proposed consent judgment and related papers required by the Antitrust Procedures and Penalties Act.”
This postponement request, they said, should be the last.
AB InBev, based in Leuven, Belgium, has been negotiating with the Justice Department for approval of a revised merger plan that would have Modelo sell control of all its brands in the U.S., as well as a brewery it built in Piedras Negras, Mexico, to Constellation Brands Inc., a winemaker and drink-distribution company.
“Any settlement would have to fully protect U.S. consumers by preserving the competition that Grupo Modelo currently provides, while giving a divestiture buyer the freedom and capability to compete vigorously going forward,” Gina Talamona, a Justice Department spokeswoman, said yesterday in a statement.
The revised transaction is still subject to regulatory approval in Mexico, AB InBev and Constellation said in separate press releases following yesterday’s filing.
AB InBev made the revised offer on Feb. 14. The U.S. has been reviewing Constellation’s plan to boost brewing capacity at the Piedras Negras plant by about 70 percent to ensure that Modelo-brand products remain viable competitors in the U.S. beer market, two people familiar with the matter said March 8.
Under the revised deal, AB InBev also gave up an option to buy back a stake in Crown Imports LLC, the U.S. distributor of Corona and the other Modelo brands. As part of the plan, Crown, owned jointly by Mexico City-based Modelo and Victor, New York-based Constellation, would be entirely owned by Constellation.
Constellation plans to invest about $400 million to expand the Piedras Negras brewery, which produces Corona, Corona Light and Modelo Especial, allowing it to supply all of Crown’s needs for the U.S. market.
AB InBev fell 1.8 percent to 75.15 euros yesterday in Brussels. Constellation declined 0.9 percent to $47.84 in New York, while Modelo dropped 1.1 percent to 110.8 pesos in Mexico City.
The case is U.S. v. Anheuser-Busch InBev NV, 13-cv-00127, U.S. District Court, District of Columbia (Washington).