Anheuser Busch Prepares for China Expansion after Settlement with Justice Department

Michael Teague |

Anheuser Busch InBev (BUD) announced that it has acquisitions planned in an effort to increase its share of the growing Chinese market.

After an unsuccessful attempt to purchase Kingway Brewery Holdings Ltd last year, Anheuser Busch is now seeking to build breweries in Western China, close to areas where their brands are already available to consumers.

This follows on Friday’s news that AB had come to an agreement with the Justice Department over the anti-trust lawsuit that is currently preventing the world’s largest beer producer from purchasing Grupo Modelo SAB.

The Justice Department had moved to block the acquisition on fears that it would allow Anheuser a monopoly over the beer market.  The terms of the settlement have Modelo selling all of its U.S. brands, as well as a factory in Mexico, to Constellation Brands Inc. (STZ).

Constellation will spend $400 million on expansion of the Piedras Negras factory, in order to help preserve the competitiveness of Modelo’s brands in the U.S.

Meanwhile AB also gave up the possibility of buying stake in Modelo’s U.S. distributor, Crown Imports LLC, currently jointly owned by Modelo and Constellation.  Under the revised deal, ownership of Crown would go entirely to Constellation.

Both parties filed for an extension of the suit on Thursday, to allow more time to work out the terms of the settlement.  The suit is postponed until April 23rd.

In pre-market trading, Anheuser’s shares were up 1.81 percent to $99.36.

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Companies

Symbol Name Price Change % Volume
SPPRP SPPRP n/a n/a n/a 0
BUD Anheuser-Busch Inbev SA Sponsored ADR (Belgium) 103.54 0.89 0.87 2,199,097

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