The U.S. Department of Justice and Anheuser-Busch InBev said on Friday they had reached an agreement in principle to settle the beer fight that has been long running. The two asked a court for an extension in the current stay in their legal battle, until April 23.
On January 31, the DOJ filed suit that was aimed at halting the planned purchase by AB InBev, the largest brewer in the world with over 200 brands, of the 50% of Grupo Modelo that it still does not have. The purchase price was estimated at over $20 billion. The DOJ said the purchase could cause prices of beer to increase in the United States.
The companies, in a joint filing in court, said that the parties had come to an agreement in principle to resolve the current litigation. When AB InBev first announced the deal, it knew it could face trouble in winning approval in the U.S. from the Justice Department for antitrust reasons.
Therefore, they announced from the start that they would be selling 50% of Crown Imports, the U.S. distributor of Modelo, to Constellation Brands, the largest wine company in the world.
However, the DOJ’s Antitrust Division quickly argued that AB InBev’s market share in the United States. was so large that it could raise its prices and sued to not allow the deal to take place.
Then in February, AB InBev said it would sell to Constellation its Piedras Negras plant owned by Modelo in Mexico close to the border with the U.S. for an estimated $2.9 billion. AB InBev also said it would grant perpetual rights to Constellation for Corona and other brands owned by Modelo in the United States.
In the statement released on Friday, AB InBev said the current agreement is significantly in line with the proposal it made to the DOJ in February.