A Long and Winding Road: A Timeline of the ABI - Modelo - Constellation Deal

FILED APRIL 20, 2013

Dear Client:

It's been a long and winding road, folks, with lots of pitfalls, false starts, and surprising turns. The analysts were bullish on this deal from the start, and while it didn't quite turn out like they thought, the end-game was where they ultimately predicted: AB InBev owning Modelo.

Here's a timeline of the major turning points in the acquisition:

June 25, 2012 - Word leaks in the financial press that ABI and Grupo Modelo are in merger talks for the 50% stake in Modelo that ABI didn't own. Deal is expected to be $10 billion. Later in the day, the price tag is speculated to have increased to $12 billion. Speculation starts immediately about antitrust concerns.

June 25, 2012 - Both ABI and Modelo confirm they are in talks.

June 29, 2012 - ABI and Modelo announce a deal fro $20.1 billion, and also a deal to sell 50% stake in Crown to Constellation for $1.85 billion, but with a ten year buy-back provision.

July 11, 2012 - Distributors speak on the deal.

August 20, 2012 - The first rumblings of antitrust trouble start to rumble as the DOJ makes a "second request" for information from ABI. For ABI's part, it still maintains that it will close the deal in the first quarter of 2013. Wall Street analysts say this is routine and they expect the deal to close.

September 13, 2012 - MillerCoors takes the focus off the ABI-Modelo momentarily when it denies Reyes request to buy Chesbay.

October 5, 2012 - Crown continues to report robust sales numbers. Constellation chief Rob Sands still maintains the deal will close by the first quarter of 2013.

October 9, 2012 - Antitrust publication Capitol Forum creates doubts that the deal will pass as it reports the DOJ is "lining up lawyers who may want to block AB InBev's purchase of Modelo." Analysts maintain that the deal will close.

November 15, 2012 - the American Antitrust Institute issues a long white paper excoriating the deal as anticompetitive.

December 14, 2012 - The New American Foundation, a liberal think tank opposed to the deal, holds a forum generally bashing the deal from an antitrust standpoint. Analysts maintain that the deal will close.

January 8, 2013 - Beer Business Daily predicts that the DOJ will sue to stop the deal due to the supply agreement Constellation will have with ABI.

January 16, 2013 - It emerges from Bloomberg that the DOJ is seemingly not interested in ABI selling off brands or production assets. The former was true, the latter not. Craft brewers are being questioned by the DOJ.

January 31, 2013 - The DOJ files suit against ABI to stop the acquisition on antitrust grounds. The DOJ says the deal would "substantially lessen competition in the market for beer in the United States as a whole and in 26 metropolitan areas across the United States, resulting in consumers paying more for beer and having fewer new products from which to choose." Analysts are shocked.

February 1, 2013 - Constellation's Rob Sands tells BBD that Crown competes with ABI, not Modelo.

February 8, 2013 - Constellation intervenes in the DOJ's lawsuit.

February 14, 2013 - ABI and Constellation announce a breakthrough deal where ABI will sell the giant Piedras Negras brewery to Constellation for $2.9 billion and providing for supply while STZ builds out the brewery. This, the thinking goes, will assuage the DOJ's concerns. Analysts are happy again.

February 20 - The DOJ, ABI, Modelo, and Constellation start negotiations regarding the updated deal.

February 26, 2013 - The financial press reports that all parties are close to a deal.

April 5, 2013 - All the parties announce that an "agreement in principle has been reached." Looks like the deal is on its way. They ask the court for a stay until April 23 to round out the details. Analysts happy.

April 19, 2013 - Done Deal. They reach an accord and file a consent decree with the court. The court takes comments for 30 days and then if it agrees, all parties can close.

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