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Antitrust
Clayton Antitrust Act
Mergers and Acquisitions

Steven Edstrom, Barry Ginsburg, Martin Ginsburg Edward Lawrence, Sharon Martin, Mark Naeger, John Nypl Daniel Sayle and William Stage v. Anheuser-Busch InBEV SA/NV, Grupo Modelo S.A.B. de C.V. and Constellation Brands Inc.

Published: Sep. 28, 2013 | Result Date: Sep. 13, 2013 | Filing Date: Jan. 1, 1900 |

Case number: 3:13-cv-1309 Bench Decision –  Dismissal

Court

USDC Northern


Attorneys

Plaintiff

Kenneth R. Schwartz

Theodore F. Schwartz

Thomas P. Pier

Derek G. Howard
(Derek G. Howard Law Firm)

Timothy May

Gil D. Messina
(Messina Law Firm PC)

Jeffrey K. Perkins
(Law Offices of Jeffrey K. Perkins)

John H. Boone

Theresa D. Moore

Jamie L. Miller
(Alioto Law Firm)

Jack Wing Lee

Joseph M. Alioto
(Alioto Law Firm)

Sean T. Tamura-Sato


Defendant

Ian G. John

Steven C. Sunshine
(Skadden, Arps, Slate, Meagher & Flom LLP)

James A. Keyte

Allen J. Ruby
(Allen Ruby, Attorney at Law)

Karen M. Lent
(Skadden, Arps, Slate, Meagher & Flom LLP)


Facts

Grupo Modelo S.A.B. de C.V. imported its beer into the United States through Crown, which was 50 percent owned by Grupo Modelo and 50 percent owned by Constellation Brands Inc.

Amheuser-Busch InBev SA/NV (ABI) owned a 51 percent interest in Grupo Modelo. In 2012, ABI agreed to purchase the remaining equity interest from Grupo Modelo's owners. Under the terms of the proposed acquisition, ABI would obtain Grupo Modelo, and Constellation would obtain the remainder of Crown plus an exclusive license to import the Grupo Modelo beer into the U.S. for 10 years.

In January 2013, the Dept. of Justice (DOJ) sued ABI alleging violation of the Clayton Act. This prompted the parties to amend the proposed offers. In contrast with the earlier proposal, Constellation would acquire an irrevocable exclusive license to import Grupo Modelo beer, and would allow Constellation itself to brew Grupo Modelo-branded beers. This new proposal alleviated the DOJ's concerns. The parties thereafter entered into a stipulation allowing ABI to move forward with the acquisitions.

On March 22, 2013, plaintiffs, consumers and purchasers of beer in the U.S., filed this instant lawsuit alleging violations of the Clayton and Sherman Acts. ABI subsequently completed the acquisition and filed a motion to dismiss the lawsuit.

Contentions

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that they would be harmed by the acquisition because it would raise the price of beer. Plaintiffs also contended that the acquisition effectively creates a monopoly and leads to price-fixing in violation of the Acts. Plaintiffs claimed that defendants violated the Tunney Act by failing to wait 60 days for public comment before consummating the merger.

DEFENDANT'S CONTENTIONS:
Defendant contended that plaintiffs failed to state a claim for which relief may be granted.

Result

U.S. district Judge Maxine M. Chesney granted defendants' motion to dismiss plaintiffs' claims for relief under the Clayton Act, Sherman Act, and Tunney Act. Plaintiffs' claim for relief under unspecified state laws was dismissed with leave to amend. The court denied plaintiffs' motion for a preliminary injunction.


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