Five entities, including NBWA, filed comments with the Justice Department during the open Tunney Act notice period. The Justice Department noted and responded to these comments in its filing this week and urged approval of the ABI-Modelo deal. A copy of their response is here. A copy of the NBWA comments can be found here. In response to the NBWA comments, the Justice Department provided clarification that ABInBev must provide notice to the DOJ for further wholesaler acquisitions. They noted;
“Accordingly, if by acquiring a beer distributor, (1) ABI were to acquire a license to distribute a non-ABI beer brand from a brewer, importer, or brand owner that derives more than $7.5 million in annual gross revenue from beer sales (sold for further resale) in the United States, and (2) the license to distribute the non-ABI beer brand generates at least $3 million in actual gross revenue in the United States, ABI will have acquired a Covered Interest in a Covered Entity, thus triggering the notice provisions of Section XII.”
The matter is now before the U.S. district court in Washington DC for final approval. It is very rare for a judge at this stage to set aside a negotiated settlement.
(earlier post) DOJ Files Tunney Act Public Notice for Comments on Proposed Judgment in ABI-Modelo Merger
The United States Justice Department issued public notice for comments on the Proposed Final Judgment, Stipulation and Competitive Impact Statement currently before the district court in Washington, D.C. Parties will have until July 23rd to file comments to the proposed action. The Justice Department will respond to any submitted comments before the court issues a final ruling on this action. Historically, the courts have been very deferential to the Justice Department and rarely “change” the deal at this stage although the court has made changes on occasion such as the NBC Universal/Comcast deal. It will be interesting to see what comments are filed with regard to the proposal as it currently stands.
For historical perspectives, this is the Justice Department response to the Tunney Act filings in the approval of InBev to buy Anheuser-Busch from 2009. The court ultimately approved that deal with no additional changes.
(Earlier Post) Agreement Reached on ABI-Modelo Deal
Noting “Effective distribution is important for a brewer to be competitive in the beer industry” the Justice Department and ABInbev filed their proposed agreement to the court.
There will be more analysis later but the Justice Department obviously took into consideration the importance of independence in beer distribution for brewers (in this case Constellation/Crown) with several remedies and references. A copy of the proposed order can be found here. The Justice Department’s Competitive Impact Statement can be found here.
(earlier post) One More Extension in DOJ-ABI/Modelo Lawsuit
The Justice Department and the parties to the ABI/Modelo litigation have agreed to one more extension. The joint motion to extend the case until April 23 notes: “At this time, the Parties have reached an agreement in principle on a resolution of this litigation based on the terms of the Revised Transaction. The Parties request this additional stay so that they may finalize the details of a proposed consent judgment and related papers required by the Antitrust Procedures and Penalties Act (“APPA”), 15 U.S.C. § 16(b)-(h), which applies to civil antitrust cases brought and settled by the United States. The Parties expect this to be their final request to extend the stay.”
So it appears there is a deal in concept but lots of other issues necessary to make all sides ready to sign off.
(earlier post) Private Lawsuit Seeks to Stop ABI-Modelo Merger
The federal court has granted the extension until April 9 and there is increasing “chatter” that a deal between the DOJ and the parties is close. However, a private Clayton Act lawsuit has now been filed on behalf of eight residents of California and Missouri. A lawsuit was filed in the Northern District of California. It greatly mimics the arguments in the DOJ’s original complaint. A copy of the complaint can be filed here.
(earlier post) Parties Seek Extension Until April 9
Citing progress on a resolution of this matter, the DOJ and ABInbev as well as the intervener Constellation Brands have jointly approached the court with an extension until April 9. A copy of the motion can be found here.
(earlier post) Judge Grants Suspension of DOJ Lawsuit Against AB InBev Until March 19
On Feb. 23, a federal judge in Washington, D.C., agreed to suspend the DOJ lawsuit against AB InBev until March 19 after all the parties requested a one month suspension so they can attempt to reach a resolution.
The Justice Department is investigating AB InBev’s proposed deal to forfeit an option to buy back a stake in Crown Imports that is being sold to Constellation. If the parties reach a settlement, the DOJ will file a notice of dismissal. If not, ABI and DOJ will prepare for trial.
(earlier post) Today the parties in the litigation submitted a joint proposal for a stay in the proceedings until March 19. The proposal notes, “The Plaintiff is investigating whether the revised transaction resolves the competitive concerns alleged in the Complaint. Defendants’ position is that the revised transaction resolves the concerns raised in the Complaint. The Parties agree that a stay of litigation proceedings until March 19, 2013 would be beneficial to the Parties.”
(earlier post) Constellation Brands and Crown Imports Seek to Intervene in DOJ-ABI Lawsuit
The judge may want to see what type of case he has before him before he commits to firm trial dates. On February 11, the court has denied without prejudice the request for a scheduling meeting for Friday the 15th due to the recent intervention. “The current parties have moved for a scheduling conference. Because two additional entities have filed a motion to intervene to which the plaintiff has not yet responded, and the defendants have not yet responded to the complaint, it is hereby ORDERED that the joint motion for a scheduling conference be, and hereby is, DENIED without prejudice.”
(earlier post) McDermott Will & Emery filed a motion on behalf of Constellation Brands and Crown Imports to intervene in the pending litigation between the Justice Department and ABInBev/Modelo. ABInBev filed a motion in support of Constellation/ Crown’s motion.
The parties for both the DOJ and defendants have also asked for a status conference before the court on February 15 or as soon as practical.
(Earlier post) Justice Department Files Lawsuit in ABInBev – Modelo Merger