Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Anheuser-Busch seeks to dismiss consumers’ challenge to SABMiller merger, (Feb 5, 2016)

By Linda O’Brien, J.D., LL.M.

Anheuser-Busch InBev’s proposed acquisition of SABMiller will not result in any increase in concentration in the production and sale of beer in the United States despite its combining the nation’s largest and second largest beer companies, according to a motion to dismiss filed by Anheuser-Busch in the federal district court in Medford, Oregon (DeHoog v. Anheuser-Busch InBev, SA/NV, February 3, 2016).

Anheuser-Busch InBev (ABI) is a multinational beverage and brewing company based in Belgium and is the world’s largest beer brewer. ABI is the largest seller of beer in the United States, accounting for more than 46 percent of the market. Headquartered in London, England, SABMiller is the world’s second largest brewer, with operations in 80 countries. In July 2008, SAB formed a joint venture with Molson Coors Brewing Company—MillerCoors, LLC. MillerCoors offers a variety of craft and import brands, and is the second largest beer company in the United States.

In November 2015, ABI announced the proposed acquisition of SAB at a purchase price of $108 billion. In December 2015, a group of consumers filed suit against ABI and SAB, alleging that the effect of the proposed merger would likely substantially lessen competition or tend to create a monopoly in the production and sale of beer in the United States.

According to its motion, ABI contends that the plaintiffs fail to state a claim under Section 7 of the Clayton Act because ABI will not acquire any of SAB’s U.S. business. As the plaintiffs’ concede, the proposed transaction contemplates SAB selling its interest in MillerCoors to its co-joint venture partner, Molson Coors. Therefore, ABI’s market share in the U.S. beer market would not change, and ABI’s ability to increase prices, control distribution, or influence retail shelving would not change.

The plaintiffs’ allegation that Molson Coors is likely to adopt more restrictive distribution practices once it becomes the sole owner of MillerCoors is speculative and conjecture, and is entirely unrelated to the transaction being challenged, ABI maintains. Allegations that ABI and SAB would have monopsony power over the commodities used in brewing beer also fail because the plaintiffs do not identify the scope of the relevant market in which ABI purportedly would have monopsony power and they do not allege a cognizable antitrust injury.

The motion also contends that the complaint should be dismissed because the plaintiffs stated no facts that could warrant the requested injunctive relief. Specifically, the plaintiffs allegedly failed to show that they will suffer irreparable injury that could not be compensated through remedies available at law. The complaint’s references to diminution in consumer choice fail to state any facts describing the harm, how it would be realized, or how the harm would be irreparable or not compensable by an award of monetary damages, ABI asserts. Accordingly, the allegations of irreparable harm are grossly deficient and the complaint should be dismissed, with prejudice, for those reasons, the motion argues.

The case is No. 1:15-cv-02250-CL.

Attorneys: Christopher L. Cauble (Cauble, Cauble & Selvig, LLP) for James DeHoog. Shannon L. Armstrong (Markowitz Herbold PC) and Vonatan Even (Cravath, Swaine & Moore LLP) for Anheuser-Busch InBev SA/NV. John R. Robertson (Hogan Lovells US LLP) and Michael G. Hanlon (Law Offices of Michael G. Hanlon) for SABMiller, plc.

Companies: Anheuser-Busch InBev, SA/NV; SABMiller plc

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