Anheuser-Busch Gets OK to Buy Mexican Brewer Modelo

by Christopher Freeburn | April 19, 2013 1:05 pm

budweiser 630 300x225 Anheuser Busch Gets OK to Buy Mexican Brewer Modelo[1]Anheuser-Busch InBev‘s (NYSE:BUD[2])¬†acquisition of Mexico’s Grupo Modelo (PINK:GPMCY[3]) appears to have overcome regulators’ objections[4].

On Friday, the companies and the U.S. Department of Justice filed a settlement agreement with a federal court that will end the government’s legal action to block the merger. Constellation Brands (NYSE:STZ[5]) will acquire $2.9 billion in assets from Anheuser-Busch and will expand production of popular Modelo beer brands in the U.S., the Wall Street Journal notes.

Federal regulators claim the terms of the deal will keep Constellation independent. It will also ensure a sufficient U.S. supply of Modelo’s beer to meet consumer demand.

The merger between Grupo Modelo and Anheuser-Busch was announced last year. Under the agreement, Anheuser-Busch, which already owns 50.4% of the company[6], would acquire the remaining stake in Modelo for $20.1 billion.

In February, the Department of Justice sued to block the merger, claiming it would restrict competition among beer brands[7] in the U.S., harming consumers.

In response to the suit, Anheuser-Busch quickly offered to sell some Modelo assets[8] to appease regulators’ concerns.

Shares of both Anheuser-Busch and Constellation Brands rose more than 1% in Friday afternoon trading.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/01/budweiser-630.jpg
  2. BUD: http://studio-5.financialcontent.com/investplace/quote?Symbol=BUD
  3. GPMCY: http://studio-5.financialcontent.com/investplace/quote?Symbol=GPMCY
  4. appears to have overcome regulators’ objections: http://online.wsj.com/article/BT-CO-20130419-706935.html?mod=googlenews_wsj
  5. STZ: http://studio-5.financialcontent.com/investplace/quote?Symbol=STZ
  6. which already owns 50.4% of the company: http://investorplace.com/2012/06/anheuser-busch-near-deal-to-buy-rest-of-modelo/
  7. restrict competition among beer brands: http://investorplace.com/2013/02/doj-blocks-budweiser-corona-beer-merger/
  8. offered to sell some Modelo assets: http://investorplace.com/2013/02/budweiser-corona-alters-merger-in-bid-for-approval/

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