On November 18, 2008 InBev N.A./S.A. completed its acquisition of Anheuser-Busch Companies, Inc., which is subject to an agreement with the DOJ ensuring the preservation of competition in Upstate New York. The agreement requires InBev to divest its subsidiary Labatt USA and its “license to brew, market and sell” Labatt-brand products for consumption in the United States. The sale of Labatt beer brands must be to an independent third party and subject to approval by the DOJ. However, the agreement will not affect InBev’s holdings or sales of Labatt products outside the United States and permits InBev to supply Labatt products to the new US licensee for a period of three years at prices and quantities subject to approval by the DOJ.
On November 14, 2008 the DOJ filed a civil lawsuit in the US District Court in Washington DC to block the transaction. Although the acquisition as originally proposed would increase the company’s concentration by only 1 percent on a national level, it would have significantly increased concentration and decreased competition in Upstate New York. Without the divestiture of Labatt, the acquisition would have increased Anheuser-Busch’s share in the beer market from 24 to 45 percent in Buffalo and Rochester and from 28 to 41 percent in Syracuse. Its largest competitor, MillerCoors has a 26 percent share in Buffalo and Rochester and a 28 percent share in Syracuse. The settlement agreement reached by InBev and Anheuser-Busch with the DOJ should, according to Deputy Assistant Attorney General Deborah A. Garza, “ensure that consumers will continue to benefit from the significant competition between the merging companies in Upstate New York.”
For additional background on the acquisition please see “DOJ Extends Review of InBev’s Planned Takeover of Anheuser-Busch” in our October 2008 Antitrust & Trade Regulation Update.