A-B InBev Cleared to Swallow VA Craft Brewer

(CN) - Anheuser-Busch InBev has divested enough beer companies to acquire the Virginia craft brewery Devils Backbone without trampling competition, federal investigators said.

The end of the Justice Department's antitrust investigation Tuesday clears the way for A-B InBev to take over Devils Backbone, headquartered in Virginia since 1992.

Tuesday's announcement comes roughly just over a month after A-B InBev made a massive concession to swallow up SABMiller, the world's second-largest beer distributor.

A deal valued at $107 billion, the record-breaking merger required A-B InBev to divest all of SABMiller's U.S. enterprises, namely the domestic-beer giant MillerCoors.

A-B InBev made similar concessions in 2013 when it bought Mexican brewer Grupo Modelo. Grupo Modelo's Corona had been the best-selling imported beer in the United States before the merger, and an independent competitor took over both Corona and Pacifico sales to clear antitrust concerns.

Since then, antitrust regulators have touted, both Corona and Pacifico sales have grown.

A-B InBev itself is the product of an earlier merger: Belgium-based InBev bought St. Louis-based Anheuser-Busch for $52 billion in 2008. In addition to Budweiser, the giant's holdings include Busch and Michelob.

As to the Goliath's purchase of Devils Backbone, Deputy Assistant Attorney General Juan Arteaga said in a statement Tuesday that "the competitive implications ... are too uncertain at this time to warrant further investigation."

Arteaga also acknowledged that while craft breweries have provided "the most diverse, innovative and dynamic brewing culture in the world."

Despite their vital role in limiting total market domination by large brewers, the Justice Department does not see any major hindrance to the market or beer industry with the ABI-Devils Backbone merger.

Though the investigation has officially ended, Arteaga added that his antitrust "division will be carefully monitoring ABI's compliance with its distribution obligations under this settlement."

The criteria for the division's review process regarding future acquisitions were also clarified.

"The division will consider whether these transactions, either singularly or collectively, are likely to harm competition by, among other things, giving ABI the ability to prevent its craft rivals from effectively getting their products to the market," Arteaga said, "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 ABI is caught breaking any of the terms approved by the division, Arteaga said it would be immediately subject to the re-opening of an investigation while the division also considered "all of its enforcement options."

Just before Labor Day, A-B InBev announced that it will begin a series of employee layoffs to curb costs during the merger transition with SABMiller. The conglomerate expects to shed 3 percent of its employees.

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