By Martinne Geller
Feb 8 Constellation Brands Inc and U.S.
beer distributor Crown Imports filed a court motion asking to be
joined as defendants in the U.S. government's complaint against
Anheuser-Busch InBev's proposed takeover of Grupo
The Motion to Intervene, filed in U.S. District Court for
the District of Columbia, and made public on Friday, seeks to
allow Constellation and Crown direct access to the legal
proceedings as neither company was named in the complaint, but
each is directly affected by its outcome.
AB InBev, the world's biggest brewer, filed a memorandum in
support of the motion. Mexico's Grupo Modelo joined in the
On Jan. 31, the U.S. Department of Justice sued to stop AB
InBev from buying the half of Modelo that it does not already
own, saying the $20.1 billion deal could mean higher U.S. beer
The antitrust suit calls into question the future of one of
the biggest deals of 2012, which would add beers like Corona
Extra and Modelo Especial to a giant portfolio that already
includes Budweiser, Beck's and Stella Artois.
In a separate but related transaction, Constellation would
acquire Modelo's half of Crown for $1.85 billion, giving
Constellation, mostly a wine company, full control of selling
Modelo beers in the United States.
AB InBev said its memorandum explains that the proper legal
standard for the DOJ's case requires evaluation of the net
effect of the two transactions. The companies say the net effect
is "a more effective and competitive Crown".
Constellation, whose brands include Robert Mondavi, Kim
Crawford and Inniskillin wines, said in a statement that Crown
will compete more effectively in the future due to more
favorable supply terms.
Through a revised supply agreement, Crown is protected from
interference from its supplier, Constellation said, noting that
the cost of beer purchased is based on a formula that adjusts
annually at a rate below the U.S. Consumer Price Index.
The case is: U.S. v. Anheuser-Busch InBEV SA/NV et al, U.S.
District Court, District of Columbia, No. 13-00127.