A few weeks back it seemed likely that the Department of Justice would let loose a little and allow Anheuser-Busch InBev to merge with Grupo-Modelo, and now it’s official. The DOJ announced today that it had approved the merger after a settlement soothed its fears over anti-competitiveness. Or maybe Anheuser just kept plying it s new BFF with drinks until it agreed.*
According to the AFP the whole deal is shaking out much like it appeared it would: The two companies have to give up Modelo’s entire U.S. business, which includes Corona beer licenses and other products to a company called Constellation Brands.
Then ABInBev can buy up the 50% of Modelo it doesn’t already own, and be in charge of distributing and growing the brand in Mexico and elsewhere in the world that isn’t the U.S.
Here’s that handy diagram of the now approved proposal again:
This will bring Constellation to an “independent, fully integrated and economically viable competitor to AB InBev,” said Bill Baer, Assistant Attorney General in charge of the department’s antitrust division.
The important thing here to the DOJ is that AB-InBev not turn into an even more ginormous behemoth than it already is, and offer consumers a wide variety of options at competitive prices.
“This is a win for the $80 billion U.S. beer market and consumers,” Baer said. “If this settlement makes just a one percent difference in prices, U.S. consumers will save almost $1 billion a year.”
ABInBev, Grupo Modelo and Constellation are now moving quickly to get everything wrapped up and ready to chug by June 2013, just about a year after ABInBev first expressed its warm intentions toward Grupo Modelo.
*That’s a joke, we know the DOJ doesn’t have one large collective mouth. Please drink responsibly, DOJ.