DOJ Vs. Anheuser-Busch InBev NV (BUD)

(3) More radically, Anheuser-Busch InBev NV (ADR) (NYSE:BUD) could drop the deal at once. It would be losing $600 million in potential synergies, but at least, by dropping the offer, the company would dissipate all uncertainties surrounding the matter. After all, BUD is well known to close a deal only if it is a great deal. Nevertheless, walking away would leave the question of what AB InBev is to do with the 50 percent of Modelo it already owns.

My educated guess is the following: BUD will go for a mix between (1) and (2). I don’t think dropping the deal is in the cards for AB InBev’s ambitious management and controlling group. I am sure the company will arrive to get to close a deal with the DOJ where they will make some core concessions in exchange for the deal to be completed more or less as planned. I would go long on BUD and I would also go long on US beer prices.

The article DOJ Vs. AB InBev originally appeared on Fool.com and is written by Federico Zaldua.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.