US: Interbrew to appeal block on Beck's integration

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Interbrew has said it will appeal the decision last week by the Southern District Court of New York that has halted the integration of Interbrew's Beck's brand into the company's Labatt USA business.

This order was granted in response to claims brought by Wisdom Import Sales, a subsidiary of FEMSA Cerveza and a 30% holder in Labatt USA, to block the integration of the Beck's brand into the LUSA portfolio without its consent. 

The Court also required that Wisdom post a US$5m bond to indemnify Labatt USA from any damages that may be suffered if the preliminary injunction is overturned.

Steve Cahillane, president and CEO of Labatt USA said that: "Clearly we are disappointed with the Court's decision. While we will comply with the decision fully, we will also be seeking to appeal it on an expedited basis."

David Tulchin of Sullivan and Cromwell, Labatt's legal counsel on the case said: "The Court found that, although the plaintiff had failed to establish that it would suffer any actual commercial harm from the integration of the Beck's brands, the consent of Wisdom Import Sales to add the Beck's brands to LUSA was required under the terms of the parties' agreement, and that a preliminary injunction was warranted to protect Wisdom's rights as a minority holder."

Hugo Powell, CEO of Interbrew, stated that: "We will promptly appeal to the Court of Appeals, and expect to argue that the injunction was improper.  Interbrew continues to believe that the addition of the Beck's brand to Labatt USA will enhance significantly Labatt USA and benefit all brands, including those of FEMSA Cerveza. 

"While the preliminary injunction remains in place, Interbrew will continue to distribute Beck's brands in the United States through Beck's North America, under the direction of current President and CEO, John Lennon."  Powell went on to say that: "The Beck's brand has turned the corner on a decade of sub-optimal growth, showing very positive signs of improved market performance in recent weeks."

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