Have a question or want to show off your project? Post it! No Registration Necessary. Now with pictures!
- Garrison Hilliard
November 17, 2008, 9:07 pm
rate this thread
Justice Dept. OKs Beer Takeover With Slight Hiccup
By LARA JAKES JORDAN and EMILY FREDRIX
Associated Press Writers
WASHINGTON (AP) -- The Justice Department approved a $52 billion beer buzz
Friday, allowing Belgium-based InBev SA to buy out Anheuser-Busch and create the
world's largest brewer.
But InBev's buzz comes with a slight hiccup: it must sell subsidiary Labatt USA
before regulators let the deal go through.
That's because Anheuser-Busch Cos. Inc. beers Budweiser and Bud Light compete
directly with Labatt Blue and Labatt Blue Light in upstate New York. Without the
sell-off condition, the Justice Department said beer prices would increase in
metropolitan Buffalo, Rochester, N.Y., and Syracuse, N.Y.
"This divestiture will ensure that consumers will continue to benefit from the
significant competition between the merging companies in upstate New York,"
Deputy Assistant Attorney General Deborah A. Garza said in a statement.
InBev and Anheuser-Busch don't compete in most other beer markets around the
country. InBev brews Stella Artois, Beck's and Lowenbrau. Anheuser-Busch
dominates the U.S. beer market with about a 50 percent share, while InBev has a
The Justice Department gave its blessing to the takeover just two days after
Anheuser-Busch shareholders approved the sale. The deal, reached in July, is
still subject to regulatory approval in Britain and China. InBev shareholders
backed the deal in September.
Anheuser-Busch and AmBev, a subsidiary of InBev that owns Labatt Brewing Co.
Ltd., said in separate statements Friday that the parties have satisfied the
Justice Department's request to sell Labatt USA to a third-party licensee.
The companies did not name the licensee, or give the terms of that deal. They
said the specifics of the deal with the licensee must be approved by the Justice
Labatt Brewing, in Canada, will brew and supply the brands to a U.S. licensee
for an interim period of three years, the companies said. The existing Labatt
USA operations, which are based in Buffalo, N.Y., will be sold to the licensee.
Anheuser-Busch said that would happen after its sale to InBev closes. It said a
closing date has not yet been announced, "but the brewers expect to complete the
transaction as promptly as practical."
The new company will be known as Anheuser-Busch InBev. It brings about the end
of more than 150 years of family rule of the St. Louis-based Anheuser-Busch,
though the newly combined company's North American headquarters will stay there.
InBev has said it will keep open all 12 of Anheuser-Busch's North American
August A. Busch IV, Anheuser-Busch's president and chief executive, will be on
the new company's board but in a non-executive role. He has said decision to
sell the nation's largest brewer was a difficult one.
AP Business Writer Emily Fredrix reported from Milwaukee.
- » TN: Mark hosts SOBER, with '29-'88 DDC, Fiorano, Kalin, Gosset, '71...
- — The site's Newest Thread. Posted in » General Wine Forum