Anheuser-Busch InBev NV (EBR:ABI), U.S Justice Department heading towards settlement

Northern, WI 03/21/2013 (avauncer) - Anheuser-Busch InBev NV (EBR:ABI) (Current: EUR 74.15, Up by: 0.72%) has purchased Grupo Modelo SAB. The U.S government has been seeking to block the purchase by filing an anti-trust lawsuit against the brewer. For the second time, Even as settlement talks continue, Anheuser-Busch and the U.S Justice Department have obtained a postponement of the lawsuit.  In a one page order signed on March 18 by Judge Richard Roberts the U.S District Court Judge in Washington ruled that the case will remain in suspension till April 9.

Logical postponement

An anti-trust lawyer, Allen Grunes who of  Brownstein Hyatt Farber Schreck LLP who has no involvement in the case said that it is logical for the judge not to insist that the litigation continue since both the parties have said that they are heading towards a settlement. Both, the Government and Anheuser-Busch InBev NV (EBR:ABI) have said that they have made substantial progress with the talks and are very close to a settlement. They said that a revised proposal has now been put forward wherein Modelo will sell control of all its brands in America as well as a brewery built by it in Piedras negras, Mexico to a winemaker and beverage distribution company, Constellation Brands, Inc (NYSE:STZ)

Sale- critical factor

The sale of the plant is a key factor in the revised proposal that has been submitted by AB InBev. Constellations plan of boosting its brewing capacity to around 70% is being looked into by the Justice department. This is important to ensure maintaining the viability as competitors in the American beer market. Constellation is planning on investing $400 million for expansion of the capacity of the plant to satisfy demands in the U.S. Anheuser-Busch InBev NV (EBR:ABI) is the largest brewer in the world and almost half the beer market in the U.S is controlled by it. Corona, the Modelo brand is the largest-selling imported beer brand in the country.