Consumers Could Not Pursue Divestiture of InBev’s Acquisition of Anheuser-Busch

This posting was written by Jeffrey May, Editor of CCH Trade Regulation Reporter.

Missouri beer consumers were not entitled to equitable relief undoing the now-consummated acquisition of Anheuser-Busch Companies, Inc. by InBev NV/SA on the ground that the transaction violated Sec. 7 of the Clayton Act, the U.S. Court of Appeals in St. Louis has decided.

Judgment on the pleadings in favor of the defendants (2010-1 Trade Cases ¶76,900) was affirmed on the ground that the divestiture remedy that the plaintiffs sought would not be appropriate.

The beer consumers had argued that the merger would eliminate InBev, the world’s largest brewer, as a “perceived” and “actual” potential competitor in the U.S. beer market. The district court rejected as conclusory allegations that InBev intended to enter the U.S. market de novo and that any rational market participant had tempered its pricing activities in the existing market because it viewed InBev as a potential de novo entrant.

While the plaintiffs raised the same arguments on appeal, the appellate court “focus[ed] instead on an independent reason why the district court did not err in dismissing the Complaint.”

Approval of Merger, Delay in Filing

The appellate court noted the “unusual posture” of the case. The merger had been approved by the Department of Justice, and the parties had combined their sizeable operations into one corporate entity. Moreover, the plaintiffs’ delay in filing their lawsuit and their motion for preliminary injunction were inexcusable. While divestiture was the only available remedy, it “would not be appropriate as a matter of law,” the court held.

“Fashioning appropriate equitable antitrust relief requires that courts balance the benefit to competition against the hardship or competitive disadvantage the remedy may cause,” the court explained. The remedial equities balanced overwhelmingly in favor of denying the remedy.

The October 27, 2010, decision in Ginsburg v. InBev NV/SA, appears at 2010-2 Trade Cases ¶ 77,205.