Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Antitrust Division ends investigation into Anheuser-Busch, Devils Backbone merger, (Sep 7, 2016)

By Greg Hammond, J.D.

The Department of Justice Antitrust Division has closed its investigation into Anheuser-Busch InBev’s (ABI’s) acquisition of Virginia-based craft brewer Devils Backbone, according to a statement by Deputy Assistant Attorney General Juan Arteaga of the Antitrust Division.

"After careful consideration, the division has determined that, in light of the distribution relief secured in the ABI/SABMiller settlement, the competitive implications of ABI’s acquisition of Devils Backbone are too uncertain at this time to warrant further investigation," Arteaga commented. "However, the division will be carefully monitoring ABI’s compliance with its distribution obligations under this settlement. The division will also carefully scrutinize any future craft acquisitions by ABI. The ABI/SABMiller settlement provides the division the opportunity to review certain of ABI’s future craft acquisitions—including acquisitions that fall below the Hart-Scott Rodino Act’s reporting thresholds."

The Antitrust Division conditionally approved ABI’s proposed acquisition of SABMiller in July. The deal is subject to the parties’ agreement to divest SABMiller’s entire U.S. business. According to the Justice Department, the divestitures will prevent any increase in concentration in the U.S. beer industry.

Arteaga noted that, in reviewing ABI’s future acquisitions, the Antitrust Division will consider whether the transactions would likely harm competition by giving ABI the ability to prevent its craft rivals from effectively getting their products to the market or the ability to increase high-end beer prices, which—in turn—would enhance ABI’s ability to raise prices in the premium and sub-premium beer segments. "If the division sees evidence that ABI may be circumventing its distribution obligations or has used multiple craft acquisitions to impair competition, it will consider all its enforcement options—including re-opening its investigation of ABI’s acquisition of Devils Backbone—and all appropriate relief."

Companies: Anheuser-Busch InBev; Devils Backbone Brewing Company

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