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Tuesday, February 5, 2013

U.S. InBev merger lawsuit underscores tougher regulatory climate, (NYSE: BUD)

Having a former top U.S. antitrust official on board was of little use in convincing regulators to bless Anheuser-Busch InBev SA's proposed $20.1 billion takeover of Grupo Modelo. Christine Varney, who ran the U.S. Justice Department's antitrust division before moving to private practice in 2011, led Modelo's defense of the deal, only to see her former colleagues sue to block it last week.Dealmakers are taking that as a sign the Obama administration will be just as tough on mergers in its second term as it was in the first and that, in turn, could give pause to chief executives pursuing big deals and force buyers to offer more compensation to sellers for the risk of failure."Reverse break up fees," or money paid to takeover targets if the acquirer fails to complete a deal for antitrust or other reasons, have been increasing in recent years and the perception of an even bigger antitrust risk could raise them even higher, say bankers and lawyers.Buyers should also be prepared for the likelihood that regulators might want bigger concessions as a condition of approving a merger, so the most conservative estimates should be used in assessing the benefits, dealmakers said.

Anheuser Busch Inbev SA is a brewing company. The Company produces, markets, distributes and sells a balanced portfolio of approximately 200 beer brands. Shares of BUD traded higher by 0.47% or $0.41/share to $88.08. In the past year, the shares have traded as low as $64.00 and as high as $94.49. On average, 1185550 shares of BUD exchange hands on a given day and today's volume is recorded at 2072813.