AB InBev Announces Agreement With DOJ on Grupo Modelo

Deal includes sale of Piedras Negras brewery, stake in Crown to Constellation

Published in CSP Daily News

LEUVEN, Belgium -- Anheuser-Busch InBev, Grupo Modelo, SAB de CV, Constellation Brands Inc. and Crown Imports LLC have reached a final agreement with the U.S. Department of Justice on the terms of a settlement of the Justice Department's litigation challenging AB InBev's proposed acquisition of the remaining stake in Grupo Modelo that it does not already own.

The parties have jointly approached the court with the terms of a proposed final judgment, which would fully resolve the Justice Department's claims in its litigation challenging the proposed acquisition.

The agreement is substantially in line with the revised transaction announced on Feb. 14, 2013. The final judgment that the parties presented to the court includes additional binding commitments to the revised transaction, which are designed to ensure a prompt divestiture of assets by AB InBev to Constellation, the necessary buildout of the Piedras Negras brewery by Constellation, as well as certain distribution guarantees for Constellation in the United States.

Once the stipulation and order (which is filed concurrently with and requires the parties to comply with the proposed final judgment) is signed by the court, AB InBev, Grupo Modelo and Constellation intend to move swiftly to complete the pending transactions. These include an all-cash tender offer of $9.15 per share by AB InBev for all the outstanding Grupo Modelo shares it does not already own and, upon completion of the tender offer, the sale of Grupo Modelo's Piedras Negras brewery and stake in Crown to Constellation.

The Mexican Competition Commission approved the revised transaction with Constellation in early April 2013; therefore, once the stipulation and order is signed, all regulatory approvals necessary for closing the transactions with Grupo Modelo and Constellation will have been obtained. The companies said that they expect the transaction to close in June 2013.

Leuven, Belgium-based Anheuser-Busch InBev is the leading global brewer, one of the world's top five consumer products companies. It has a portfolio of more than 200 beer brands, including Budweiser, Stella Artois and Beck's, alongside Leffe, Hoegaarden, Bud Light, Skol, Brahma, Antarctica, Quilmes, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, Hasseroder and Jupiler. It also owns a 50% equity interest in the operating subsidiary of Grupo Modelo, Mexico's leading brewer and owner of the global Corona brand. In 2012, AB InBev realized $39.8 billion in revenue.