By the beerest of margins

Published On 16/11/2012 | By Peta Stevenson | Mergers
The proposed Budweiser–Corona deal, first made public in late June this year, has come under renewed scrutiny in the US this week despite receiving clearance from the Mexican Competition Authority on 15 November 2012.
Anheuser-Busch InBev, which already owns 50% of Mexico-based Grupo Modelo, had agreed to take over the Corona producer for US$20.1 billion on the basis that Modelo would sell its stake in Crown Imports, the exclusive importer of Corona into the US.
The deal, subject to antitrust clearance in the US, Mexico and beyond, has been subject to attack from the antitrust mafia with the American Antitrust Institute releasing a 17 page white paper in opposition. Supplemented by a 117 page monograph, the AAI argues that the takeover will increase Anheuser-Busch InBev’s control over the war to stock and price Corona in the US.
Back in 2008, InBev had to spin off its US-based sales of Canadian label Labatt to get clearance for its acquisition of St. Louis based Anheuser-Busch. That deal had added spice with Anheuser using a JV between Labatt and the Cuban government to try and stymie the acquisition.
Like the Anheuser deal, in which juicy details of fights between the family shareholders of Anheuser regularly making the business pages, this deal has also required negotiations with the family controlling the target. Anheuser-Busch InBev agreed to preserve the Mexican identity of Grupo Modelo by maintaining its Mexico City HQ and its local board.
Local concerns of this nature have also resonated in Australian beer deals, such as Lion Nathan’s 2007 acquisition of J Boag & Sons, and last year’s acquisition of Foster’s by SABMiller. In each instance, while the ACCC did not oppose the acquisition on the basis that they were not likely to substantially lessen competition in the Australian market for the supply of bulk and packaged beer, emotions ran high about the seizure of these quintessentially Australian brands with statements like “Foster’s is Australian no more” hitting the headlines.
Image credit: Hot Meteor, Flickr
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About The Author

is a partner in the Sydney office of King & Wood Mallesons where she specialises in competition litigation with experience in a wide range of jurisdictions. Peta also advises clients on the application of the anti-competitive conduct, consumer protection and access provisions of the Competition & Consumer Act 2010 (Cth) and related state legislation. In 2001/02 she undertook her LLM at the University of Cambridge, during which time she developed a passionate if fleeting interest in rowing.

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