The Justice Department and Anheuser-Busch InBev have agreed to conditions that will allow the beer giant to expand its stake in Mexico's Grupo Modelo, according to court documents and company statements on Friday.
The department had filed a lawsuit Jan. 31 aimed at stopping AB InBev—the world's largest brewer, with some 200 brands—from buying the 50 percent of Modelo it does not already own for $20.1 billion.
The agreement looks like a victory for AB InBev, which knew early on that the Justice Department would balk at letting it expand its significant U.S. presence. AB InBev's goal in the deal is to increase the sales of Corona and other Modelo brands outside the U.S.
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The arrangement requires AB InBev to sell the Piedras Negras brewery in Mexico, which makes Corona and other Modelo brand beers for the U.S. market. It also requires the purchaser, Constellation Brands, to expand the brewery so that it can make at least 20 million hectoliters of beer by Dec. 31, 2016.
The other big winner is Constellation, which would become the third-largest U.S. beer producer after AB InBev and MillerCoors. Constellation has been a U.S. wine giant to this point.
AB InBev is the top U.S. beer seller, whose brands range from big names Budweiser and Stella Artois to craft-style beers such as Shock Top and Goose Island. The No. 2 player, MillerCoors, is a joint venture between SABMiller and Molson Coors.
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The deal announced Friday is similar to the one AB InBev had offered in mid-February but adds Constellation as a defendant to the settlement with the department. That means that Constellation's pledges to the court to make the plant big enough to serve the U.S. market will be legally binding.
The agreement means that the companies can close the transaction as soon as a court approves their settlement. InBev said in a statement that they expect that to be in June.