James Wilmore

US: Anheuser-Busch InBev, Modelo deal to get DoJ go-ahead - analyst

By | 15 February 2013

A-B InBev has made a bid to appease anti-trust concerns over its move for Modelo

A-B InBev has made a bid to appease anti-trust concerns over its move for Modelo

Anheuser-Busch InBev's concessions over its Grupo Modelo acquisition means it is now likely to get the green light from US regulators, according to an analyst.

In a note yesterday (14 February), Stifel analyst Mark Swartzberg said: "We expect the Department of Justice (DoJ) to approve the transaction as it is aggressive, was motivated by the DoJ's objections, and, in our opinion, satisfies them by making Crown a truly independent competitor of A-B InBev in the US." It came after A-B InBev announced this week that it will sell the perpetual rights to Modelo's products in the US and the Mexican group's Piedras Negras brewery to Constellation Brands for US$2.9bn.

The concessions came after the DoJ filed an anti-trust lawsuit over the $20.1bn deal.

However, Swartzberg noted that brewing is a "new line of business" for Constellation and Crown Imports management and carries "execution risk". But he added: "Nine times EBITDA is the low end of brewer multiples, suggesting this business still has a positive present value, or is potentially additive to $45 per share, all else being equal."

For just-drinks' take on the latest developments, click here.

Expert analysis

2012 The U.S. Beer Market

This "value set" report combines Beer in the U.S., Imported Beer and Specialty Beer and Microbrewery Markets to create the most exhaustive study of the U.S. beer market available. An $18,000+ value that is priced much lower, it scrutinizes all aspects, covering state and regional markets, distribution channels, brewers and brands, imports, exports, packaging, pricing, advertising, demographics and projections. It also provides in-depth examination of the mergers, acquisitions and joint ventures reshaping the industry plus projections through 2016.

Sectors: Beer & cider, Mergers & acquisitions

Companies: InBev, Modelo, Constellation

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