Bloomberg News

AB InBev Judge Refuses to Block Modelo Buyout in Antitrust Case

June 05, 2013

A group of consumers who claimed Anheuser-Busch InBev NV (ABI)’s $20 billion acquisition of Grupo Modelo SAB (GPMCF:US) will lead to higher beer prices lost their bid for a court order blocking the deal.

It would be “difficult and awkward at this point to set aside the transaction” completed yesterday morning, U.S. District Judge Maxine Chesney said at a hearing yesterday afternoon in San Francisco. She considered a request for a temporary restraining order by Joseph Alioto, attorney for nine consumers who filed an antitrust lawsuit to block the deal on grounds that it will reduce competition.

Budweiser-maker AB InBev, the world’s largest beer company, agreed as part of the merger to sell Mexico City-based Modelo’s stake in their joint U.S. distribution venture to Constellation Brands Inc. (STZ:US) for $1.85 billion. Constellation “will be in no position to maintain lower prices in the face of ABI constant pressure to increase prices,” Alioto said in a June 3 court filing.

“The plaintiff would have to show that it is not a legitimate transaction, that it’s a sham,” Chesney said. “I do not find that the plaintiff has made that showing by this time.”

The U.S. said its agreement with Leuven, Belgium-based AB InBev to turn Victor, New York-based Constellation into a competing brewer could save beer drinkers almost $1 billion a year because of lower prices.

Alioto has sued to block other deals, including the one that created United Continental Holdings Inc. and the merger of Southwest Airlines Co. (LUV:US) and AirTran Holdings Inc.

The case is Edstrom v. Anheuser-Busch InBev NV, 13-cv-01309, U.S. District Court, Northern District of California (San Francisco).

To contact the reporters on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net; Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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Companies Mentioned

  • GPMCF
    (Grupo Modelo SAB de CV)
    • $8.97 USD
    • 0.00
    • 0.0%
  • STZ
    (Constellation Brands Inc)
    • $87.13 USD
    • -0.44
    • -0.5%
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