Corona-Bud revise deal to appease regulators

NEW YORK — Anheuser-Busch InBev changed the terms of its proposed $20.1 billion acquisition of Mexican brewer Grupo Modelo on Thursday in an attempt to push through a deal that federal regulators say will kill competition.

AB InBev is willing to sell Modelo’s Piedras Negras brewery and give perpetual rights for Corona and the Modelo brands in the U.S. to Constellation for $2.9 billion, the company said Thursday. The brewery, which currently makes Corona, Corona Light and Modelo Especial, will give Constellation total control over the production of Corona and Modelo in the U.S.

Under previous terms of the complicated deal, Modelo would sell its half of Crown Imports to wine maker Constellation Brands Inc. to address antitrust concerns, but InBev maintained the right to end an import agreement with Crown Imports, and that was to be exercisable every 10 years.

Regulators are leery of the tie-up because AB InBev and Modelo control about 46 percent of annual U.S. sales.

Justice Department spokeswoman Gina Talamona said in a statement that the department can’t comment on a specific proposal, but that it “would give any proposal serious consideration and at the same time we would continue to prepare for litigation.”

Anheuser-Busch was purchased by Belgium’s InBev in 2008. The combined company is already the world’s biggest brewer and makes Budweiser, Beck’s and Stella Artois, among others.

Last month the Justice Department filed a lawsuit to block the deal, saying that one company controlling nearly half of all U.S. beer sales would stifle competition and increase prices.

On Thursday, AB Inbev said the sale of the brewery which supplies the domestic market would give Crown total control over supply.

“We believe this revised agreement addresses all of the concerns raised by the U.S. Department of Justice in its lawsuit, leaving no doubt about Constellation’s Crown beer division’s complete independence and ability to compete,” InBev said in a statement released Thursday.

AB InBev rose $5.16, or 5.9 percent, to $93.42 in morning trading Thursday, while Constellation jumped $10.93, or 34.3 percent, to $42.81.

Constellation’s stock hit an all-time high of $44 earlier in the session.

More in Herald Business Journal

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Washington, Amazon sue company over seller training programs

Braintree is accused of using deceptive ads promising information on how to make money on Amazon.

The Marine Corps’ version of the F-35 Joint Strike Fighter is designed to land vertically like a helicopter. (Lockheed Martin)
F-35 fighter costs, $1 trillion over 60 years, draw scrutiny

Pentagon’s ability to repair F-35 parts at military depots is six years behind schedule.

Incidents of severe disturbances on commercial flights climb

The number of cases in which the cabin crew had to restrain a passenger rose to 169 last year.

Funko mascots Freddy Funko roll past on a conveyor belt in the Pop! Factory of the company’s new flagship store on Aug. 18, 2017. (Dan Bates / The Herald)
Funko starts to bounce back after disappointing stock debut

The Everett toys-and-collectibles maker also announced the acquisition of an animation studio.

Now hiring: Younger factory workers, at Boeing and elsewhere

The company and its training partners are fighting perceptions of a dying manufacturing industry.

‘The President Stole Your Land’: Patagonia, REI blast Trump

The outdoor recreation industry is allied with Indian tribes and conservationists.

Most Read