The Department of Justice gave its approval on Friday, Sept. 18 for Anheuser-Busch InBev (NYSE:BUD) to move ahead with its acquisition of Craft Brew Alliance (NASDAQ:BREW) -- or what Craft Brew calls an "expanded partnership." The deal been in limbo since February, when an antitrust examination began, but has now cleared a major hurdle on the way to closing.

The approval is contingent on the two parties' agreement to sell the Hawaiian operations of Kona Brewing to PV Brewing Partners, LLC. Craft Brew Alliance and Anheuser-Busch suggested the divestiture back on June 10 as a way to "expedite the regulatory review process and alleviate potential regulatory concerns."

A spiral bound book titled "Merger and Acquisitions" amid other books and a calculator on a desk.

Image source: Getty Images.

The DOJ made the Kona spinoff an official condition of its approval on Sept. 18, publishing a notice saying the divestiture is required to "maintain competition in the beer industry in Hawaii." Expanding on the DOJ's reasoning, Assistant Attorney General Makan Delrahim said the "merger, as originally structured, would have significantly increased market concentration in Hawaii and eliminated the growing competition between ABI and CBA brands."

Anheuser-Busch InBev and Craft Brew Alliance will grant PV Brewing Partners a perpetual license to brew and market Kona beer in Hawaii, along with selling it a new brewery with a capacity of 100,000 barrels and other Kona facilities in the state.

Anheuser-Busch has owned a 31% stake in Craft Brew since 2016, but the deal will give it 100% ownership, paying $16.50 per share to Craft Brew's shareholders at closing. CBA's shares ended Friday trading up 6% on the news. Anheuser-Busch's Brewers Collective president Marcelo Michaelis said the beverage giant expects the combination "to help fuel the growth of the craft beer category" in the "competitive and dynamic" American beer market.

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