James Wilmore

US: Anheuser-Busch InBev, Modelo deal under threat - analyst

By | 16 January 2013

The merger is facing scrutiny from US regulators

The merger is facing scrutiny from US regulators

Anheuser-Busch InBev's bid to acquire the rest of Grupo Modelo could collapse due to “draconian” measures that US regulators are insisting on, according to an analyst.

In a note late yesterday (16 January), Ian Shackleton of Nomura said: “We now believe that the deal will not happen or will be subject to significant remedies that will substantially reduce the potential upside for A-B InBev shareholders.” According to the New York Post earlier this week, the US Department of Justice (DoJ) could ask the brewer to sell some of its “non-core” US brands to satisfy anti-trust fears.

Shackleton added: “We believe that this could require a full disposal of the assets and brands for the US to a third party, which in turn would create dis-synergies and likely further loss of value.” 

However, an A-B InBev spokeperson told just-drinks today that the company still expects the transaction to close in the first quarter of this year. The company declined to comment on the DoJ review. 

The company previouly said it was working proactively with regulators on the US$20.1bn deal, first announced last June.

Shackleton said if the deal does not complete, A-B InBev could consider other M&A options. This might include buying out the 40% of AmBev it does not already own. But, he noted the Brazilian company's share price is at “an all-time high”. 

The analyst also suggested that a move for SABMiller by the Belgium-headquartered brewer remains some way off. “We remain sceptical about a bid for SABMiller, given its high exposure to markets outside A-B InBev’s comfort zone and minimal upside potential from running the assets better," Shackleton said.

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, SABMiller

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