AB InBev announced to have reached a agreement in principle with the US Department of Justice on the DoJ’s litigation concerning the proposed (revised) acquisition of Modelo minorities by AB InBev. The parties involved (AB InBev, Grupo Modelo, Crown, Constellation) and the DoJ have approached the court to request another extension of the stay of the proceedings until 23 April in order to finalize the details and the definitive agreements and papers required for a full settlement. AB InBev commented in its press release that the parties have indicated this should be the final request to extend the stay. AB InBev also mentions in its pressrelease that the revised transaction is still subject to regulatory approval in Mexico. Our view: After AB InBev announced a revised deal with Constellation Brands on 14 February whereby Constellation Brands would acquire the Piedras Negras brewery and the perpetual rights on the Modelo brands in the US market, we believed chances had substantially increased that the deal would finally go through. The agreement in principle announced today is a significant step forward and the chances of the deal faltering now seem very low. Note that the needed regulatory approval in Mexico on the revised transaction should not be a challenge as the original transaction was already previously approved. On the back of the increasing likelihood AB InBev will finally acquire Grupo Modelo we decided to increase our target price from € 71 to € 75 while maintaining our Hold rating.