US: Anheuser-Busch InBev plays down fresh concern over Grupo Modelo deal
A-B InBev says the deal is still cut to complete in calendar Q1 next year
Anheuser-Busch InBev has insisted it is still on-track to complete its takeover of Grupo Modelo early next year despite reports that the US regulatory authorities have raised concerns over the US$20bn transaction.
The Capitol Forum, a news service that tracks anti-trust events, reported on Tuesday (9 October) that the Department of Justice (DoJ) could reject the deal as it stands, due to competition issues. Shares in A-B InBev were hit this week, following the report.
But, in a statement to just-drinks, the brewer said: “We continue to believe that the transaction will close during the first quarter of 2013.”
As part of the deal, Modelo has already agreed to sell its 50% stake in US beer import JV Crown Imports to its partner, Constellation Brands, to avoid A-B InBev facing competition issues in the country. But, it emerged in August the DoJ had made a second request to A-B InBev for additional information overt the transaction.
Analysts Stifel Nicolaus, however, also played down the speculation. “We continue to have a hard time constructing a clear, persuasive, major US antitrust concern,” it said in a note.
"As proposed, A-B InBev gets smaller in the US, selling an indirect 25% stake in a 6% US share player ie. 50% ownership of Modelo which is 50% owner of Crown, which has 6% US share."
However, it did say that the final deal may “differ” from the current arrangement. The contract between A-B InBev and Modelo allows for the Budweiser brewer to sell US$3bn of assets to satisfy regulatory concerns.
“Regulatory adjustments are within the parameters of acceptability to ABI,” Stifel Nicolaus added.
Constellation Brands CEO, Rob Sands, said last week he remains "excited" about owning 100% of Crown Imports and expects that transaction to complete by March.
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