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From Antitrust Law Daily, August 9, 2018

Private antitrust claim against merger of Anheuser-Busch InBev and SABMiller fails

By Wendy Biddle, J.D.

The U.S. Court of Appeals in San Francisco has affirmed the dismissal of a private lawsuit challenging Anheuser-Busch InBev’s acquisition of SABMiller, finding that because the Department of Justice required SABMiller to divest its US domestic beer business as a requirement for the transaction, it was not plausible to assert that the acquisition would lessen competition in the market. Accordingly, the court ruled that consumers had failed to state a claim under the Clayton Act (Dehoog v. Anheuser-Busch InBev SA/NV, August 8, 2018, McKeown, M.).

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 $107 billion. In December 2015, the DOJ’s antitrust division filed suit to block the transaction and proposed a settlement, which was accepted. The settlement required that Molson would acquire SAB’s interest in MillerCoors. At the same time, 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.

The court found that because SAB had completely divested its interests in MillerCoors to Molson, ABI’s acquisition of SAB did not create "a reasonable probability of anticompetitive effects in the US." The consumers cited cases that involved removing of a competitor from the relevant market, but because SAB did not compete in the market before the transaction except as MillerCoors, and after the transaction MillerCoors still competes in the market, the court concluded that ABI did not acquire any interest in the US market and MillerCoors remains a competitor in the market.

The consumers also alleged that Molson Coors is likely to adopt more restrictive distribution practices once it becomes the sole owner of MillerCoors. The court found this allegation was speculative and conjecture, and entirely unrelated to the transaction being challenged.

The court further found that the district court did not abuse its discretion when it dismissed the complaint with prejudice. The consumers’ anti-competition arguments were deficient, and the court found that further allegations would not remedy the complaint.

This case is No. 16-35912.

Attorneys: Joseph M. Alioto (Alioto Law Firm) for James DeHoog. Yonatan Even (Cravath Swaine & Moore LLP) for Anheuser-Busch InBev SA/NV and SABMiller, PLC.

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

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