                FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


JAMES DEHOOG; BRIAN BOUTELLER;           No. 16-35912
SHONNA BOUTELLER; CARLY
BOWEN; TOM BUTTERBAUGH; ERICA              D.C. No.
I. CORONA; MARIA G. CORONA;             1:15-cv-02250-
CHRIS DENNETT; JOHN DESBIENS;                 CL
MATTHEW JOHNSON; CYNTHIA A.
KREITZBERG; EDWARD LAWRENCE;
JERUSHA MALAER; ROBERT                     OPINION
MALAER; MICHAEL MARTIN;
MICHAEL MCATEE; DAVID
MILLIGAN; JEFF REEDER; RALPH
REEDER; WADE SCAGLIONE; BETH H.
SILVERS; BRADLEY O. SILVERS;
PATRICE WADE,
               Plaintiffs-Appellants,

                 v.

ANHEUSER-BUSCH INBEV SA/NV;
SABMILLER, PLC,
             Defendants-Appellees.



      Appeal from the United States District Court
               for the District of Oregon
        Ann L. Aiken, District Judge, Presiding

          Argued and Submitted May 15, 2018
                   Portland, Oregon
2                DEHOOG V. ANHEUSER-BUSCH

                      Filed August 8, 2018

     Before: M. Margaret McKeown and Richard A. Paez,
    Circuit Judges, and Cynthia A. Bashant, * District Judge.

                  Opinion by Judge McKeown


                          SUMMARY **


                             Antitrust

    The panel affirmed the dismissal of an action brought
under § 7 of the Clayton Act by consumers and purchasers
of beer, seeking to enjoin Anheuser-Busch InBev, SA/NV,
from acquiring SABMiller, plc.

    As a condition of approving the transaction, the U.S.
Department of Justice required SABMiller to divest entirely
its domestic beer business. Because the divestiture left
SABMiller without a presence in the U.S. beer market, the
consumers did not and could not plausibly allege that ABI’s
acquisition of SABMiller would substantially lessen
competition in that market. The panel held that the
consumers therefore failed to state a claim under the Clayton
Act.



     *
       The Honorable Cynthia A. Bashant, United States District Judge
for the Southern District of California, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
              DEHOOG V. ANHEUSER-BUSCH                    3

                       COUNSEL

Joseph M. Alioto (argued) and Jamie L. Miller, Alioto Law
Firm, San Francisco, California; Rachele R. Selvig and
Christopher L. Cauble, Cauble and Cauble LLP, Grants Pass,
Oregon; Gil D. Messina, Messina Law Firm P.C., Holmdel,
New Jersey; Jeffery K. Perkins, Law Offices of Jeffery K.
Perkins, Tiburon, California; for Plaintiffs-Appellants.

Yonatan Even (argued), Cravath Swaine & Moore LLP,
New York, New York, for Defendants-Appellees.


                        OPINION

McKEOWN, Circuit Judge:

    This case features a bevy of beer aficionados trying to
undo the acquisition of one brewing behemoth by another.
James DeHoog and other consumers and purchasers of beer
(“Consumers”) appeal the district court’s dismissal of their
private antitrust action to enjoin Anheuser-Busch InBev,
SA/NV (“ABI”) from acquiring SABMiller, plc (“SAB”).
Although the merger closed in October 2016 with the
blessing of antitrust authorities, Consumers’ private suit
persists.

    Like the district court, we conclude that Consumers
failed to state a claim under Section 7 of the Clayton Act,
15 U.S.C. § 18. As a condition of approving the transaction,
the U.S. Department of Justice (“DOJ”) required SAB to
divest entirely its domestic beer business. Because the
divestiture left SAB without a presence in the U.S. beer
market, Consumers did not and could not plausibly allege
4                  DEHOOG V. ANHEUSER-BUSCH

that ABI’s acquisition of SAB would substantially lessen
competition in that market.

                             BACKGROUND

    ABI, whose brands include Budweiser, Stella Artois, and
Michelob Ultra, is the largest producer and seller of beer in
the United States, comprising roughly 46 percent of the U.S.
market share. At the time of this suit, SAB was a
multinational brewing company that operated in the United
States exclusively through a joint venture with Molson
Coors Brewing Company (“Molson”). 1 The SAB/Molson
joint venture, MillerCoors, LLC (“MillerCoors”), was the
second-largest producer and seller of beer in the United
States, controlling roughly 25 percent of the U.S. market
share. 2

    In November 2015, ABI and SAB announced the terms
of a $107 billion acquisition of SAB by ABI. As part of the
transaction, ABI also announced a contingent agreement
with Molson: upon completion of ABI’s acquisition of SAB,
SAB would completely divest its interest in MillerCoors.
Per the terms of the agreement, Molson would acquire
SAB’s 50 percent voting interest and 58 percent economic
interest in MillerCoors, making MillerCoors a wholly-
owned subsidiary of Molson. Molson would maintain full
control of the business operations and resulting economic
benefits of MillerCoors. In short, ABI would acquire SAB


    1
        Molson, the world’s third largest brewer, is not a defendant.

    2
      SAB and Molson each held 50 percent of the governance rights in
MillerCoors. The DOJ approved the MillerCoors joint venture in 2008.
MillerCoors brands include Miller Lite, Coors Light, Blue Moon, and
Zima.
                DEHOOG V. ANHEUSER-BUSCH                         5

but not before spinning off SAB’s ownership in MillerCoors
(i.e., SAB’s U.S. interests) to Molson.

   After reviewing the proposed transaction for its effect on
competition, on July 20, 2016, the DOJ reached a settlement
with ABI to allow the acquisition to move forward. ABI was
required to divest SAB’s entire U.S. business—including
SAB’s ownership in MillerCoors—such that the settlement
would “prevent any increase in the concentration in the U.S.
beer industry.” The settlement also prohibited ABI from
acquiring beer distributors or brewers without allowing for
DOJ review of the acquisition’s likely competitive effects
and prevented ABI from engaging in certain anti-
competitive practices. According to the DOJ, the settlement
would “help preserve and promote competition” in the U.S.
beer industry.

    That same day, the DOJ Antitrust Division filed a civil
lawsuit against ABI in the U.S. District Court for the District
of Columbia to block the transaction, on the ground that the
acquisition violated Section 7 of the Clayton Act, along with
the proposed settlement, which—if approved by the court—
“would resolve the competitive harm alleged in the
lawsuit.” 3 The filings complied with the requirements of the
Antitrust Procedures and Penalties Act (“the Tunney Act”),
a part of the federal government’s review of certain mergers
and acquisitions. 15 U.S.C. § 16. Pursuant to the Tunney
Act, the DOJ published the terms of the settlement and a
competitive impact statement in the Federal Register and
gave the public 60 days to submit comments. Id. § 16(d).



    3
      See United States v. Anheuser-Busch InBev SA/NV, No. 1:16-cv-
01483 (D.D.C.).
6               DEHOOG V. ANHEUSER-BUSCH

    After consideration of the public comments, the DOJ and
several international competition authorities cleared the
transaction, which closed on October 10, 2016. Molson then
promptly announced that it had completed its acquisition of
SAB’s interest in MillerCoors. At the time of this opinion,
one Tunney Act procedure remains outstanding: the U.S.
District Court for the District of Columbia must determine
whether entry of the settlement “is in the public interest.” Id.
§ 16(e). In making that determination, the court may “take
such other action in the public interest as the court may deem
appropriate.” Id. § 16(f).

    Parallel to the government’s antitrust enforcement
efforts, on December 1, 2015, Consumers filed a private
antitrust action against ABI and SAB in the District of
Oregon, seeking to enjoin the acquisition.4 Consumers
likewise alleged that the proposed acquisition violated
Section 7 of the Clayton Act, “in that the effect of the
proposed acquisition may be substantially to lessen
competition, or to tend to create a monopoly in the
production and sale of beer in the United States.” More
specifically, Consumers alleged that the acquisition
threatened to cause them “loss and damage in the forms of
higher prices, fewer services, fewer competitive choices,
diminished product quality and product diversity, [and]
suppression and destruction of smaller competitors through
exclusive distribution arrangements . . .” Consumers further
claimed that the acquisition would “increase ABI’s buying
power” globally. Although Molson was not a named
defendant, Consumers made a corollary allegation regarding
Molson’s acquisition of SAB’s interest in MillerCoors:
“Given the resulting change in management and Molson’s

    4
      Consumers are “twenty-three consumers and purchasers of beer in
the United States” who reside in Oregon, California, and Washington.
               DEHOOG V. ANHEUSER-BUSCH                      7

new increased size and scope in the United States market
following the ABI-SAB acquisition, Molson’s management
is likely to have incentives to change its practices to match
ABI’s.”

    The district court dismissed the complaint for failure to
state a claim. The court found that Consumers failed to
allege that the acquisition would increase ABI’s market
power in the U.S. beer market; allegations regarding
Molson’s future conduct in the ownership of MillerCoors
were too speculative to state a claim for relief against ABI;
and allegations concerning ABI’s buying power were too
vague to state a plausible claim. In dismissing with
prejudice, the court concluded that any amendment to the
complaint would be futile because Consumers “cannot
plausibly allege that the challenged transaction will increase
either ABI’s market share or the concentration of firms in
the U.S. beer market.” By securing the complete divestiture
of MillerCoors, the DOJ had reached a settlement to prevent
increased concentration in the U.S. beer industry.

                          ANALYSIS

    This appeal centers on a longstanding antitrust law that
empowers the public to sue to block allegedly
anticompetitive mergers. Section 7 of the Clayton Act
generally prohibits business acquisitions whose effect “may
be substantially to lessen competition, or tend to create a
monopoly” in a relevant market. 15 U.S.C. § 18. In
addition, “[a]ny person” may “sue for and have injunctive
relief . . . against threatened loss or damage by a violation
of” Section 7, as long as the standard equitable principles for
injunctive relief are met. Id. § 26.
8                DEHOOG V. ANHEUSER-BUSCH

I. CONSUMERS FAILED TO STATE A CLAIM UNDER THE
   CLAYTON ACT

    Our de novo review of a dismissal under Federal Rule of
Civil Procedure 12(b)(6) is limited to the complaint,
materials incorporated into the complaint by reference, and
matters of which the court has taken judicial notice. See
Metzler Inv. GMBH v. Corinthian Coll., Inc., 540 F.3d 1049,
1061 (9th Cir. 2008). 5 We benchmark Consumers’ claims
against the now-familiar standard of Twombly and Iqbal: “a
complaint must contain sufficient factual matter, accepted as
true, to ‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell
Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Those factual allegations “must be enough to raise a right to
relief above the speculative level.” Twombly, 550 U.S. at
555.

    Section 7 of the Clayton Act requires Consumers to “first
establish a prima facie case that a merger is anticompetitive.”
Saint Alphonsus Med. Ctr.-Nampa Inc. v. St. Luke’s Health
Sys., Ltd., 778 F.3d 775, 783 (9th Cir. 2015). In practical
terms, this means adequately alleging facts that an
acquisition creates “an appreciable danger” or “a reasonable
probability” of anticompetitive effects in the relevant
market. Id. at 788; FTC v. Warner Commc’ns Inc., 742 F.2d
1156, 1160 (9th Cir. 1984). 6 Consumers’ allegations do not
belly up to this bar.


    5
       Consumers’ motion to take judicial notice of government
documents, court filings, press releases, and undisputed matters of public
record concerning the ABI-SAB transaction (Dkt. No. 17) is granted.
    6
      The parties agree that the relevant product market is the production
and sale of beer, and the relevant geographic market is the United States.
                   DEHOOG V. ANHEUSER-BUSCH                                  9

    A. BECAUSE OF THE DIVESTITURE, ABI DID NOT
       ACQUIRE AN ACTUAL COMPETITOR IN THE U.S.
       BEER MARKET

    Consumers’ frontline allegations are that the acquisition
eliminated SAB as an “actual . . . competitor in the United
States.” But as the district court correctly found, ABI’s
acquisition of SAB did not create a reasonable probability of
anticompetitive effects in the U.S. beer market because ABI
did not acquire any business interests in the U.S. beer
market. Pre-transaction, SAB operated in the United States
exclusively through its joint venture MillerCoors. As a
condition of closing the acquisition, SAB divested
completely its interests in MillerCoors to Molson. By
requiring full divestiture of SAB’s U.S. interests, the DOJ
ensured that the acquisition will not create “any increase in
the concentration in the U.S. beer industry.”

    Faced with a similar ABI acquisition, we recently
affirmed dismissal of a Section 7 suit for failure to state a
claim, albeit in an unpublished disposition. See Edstrom v.
Anheuser-Busch InBev SA/NV, 647 F. App’x 733 (9th Cir.
2016), cert. denied, 137 S. Ct. 258 (2016). 7 In that case, beer
purchasers sought to enjoin ABI and Constellation Brands,
Inc. (“Constellation”) from acquiring Grupo Modelo S.A.B.
de C.V. (“Modelo”). Under the terms of that agreement,
“ABI would purchase Modelo but grant Constellation an
irrevocable, exclusive license to import Modelo brands into
the United States.” Id. at 735. ABI retained no right to sell
Modelo beer in the United States. Id. Because “the

    7
       Although our decision in Edstrom is not precedential and we do
not rely on it here, it is instructive as to the reality of a transaction where
ABI acquired no interests in the U.S. market. See Ninth Circuit Rule
36-3.
10               DEHOOG V. ANHEUSER-BUSCH

challenged transaction d[id] not increase ABI’s market share
or the concentration of the U.S. beer market,” we concluded
that “Plaintiffs failed to plausibly allege a prima facie case
that the challenged transaction is anticompetitive.” Id. So
too, here. The challenged transaction did not increase ABI’s
market share because ABI acquired no interests in the United
States. The concentration of the U.S. beer market stayed
precisely the same because MillerCoors remained in the
market as a competitor (with SAB’s share transferred fully
to Molson).

    Since SAB did not compete in the market before the
transaction except as MillerCoors, and MillerCoors still
competes in the market, Clayton Act cases addressing the
elimination of an actual competitor in a relevant market—
and a concomitant increase in market concentration—are
inapposite. 8 Consumers argue that these cases “establish the
illegality of any nontrivial acquisition of a competitor,
whether or not the acquisition was likely either to bring
about or shore up collusive or oligopoly pricing” in a highly
concentrated market like the U.S. beer market. See Hospital
Corp of America v. FTC, 807 F.2d 1381, 1386 (7th Cir.
1986). Yet with the exception of the potential competitor
cases, discussed below, Consumers’ cited cases involve the
removal of an actual competitor from the relevant market.
MillerCoors remains as a competitor in the market.



     8
      See, e.g., United States v. Pabst Brewing Co., 384 U.S. 546, 550
(1966) (merger of “two very large brewers competing against each other
in 40 States”); United States v. Von’s Grocery Co., 384 U.S. 270, 277
(1966) (merger of “two of the most successful and largest [grocery
stores] in the area” to create the second largest grocery store in Los
Angeles); United States v. Aluminum Co. of Am., 377 U.S. 271, 281
(1964) (acquisition of “an aggressive competitor” in the same market).
               DEHOOG V. ANHEUSER-BUSCH                     11

   B. ABI DID NOT ACQUIRE A POTENTIAL
      COMPETITOR “POSITIONED AT THE EDGE OF THE
      MARKET, CONTINUALLY THREATENING TO
      ENTER”

    Recognizing the reality that ABI did not acquire an
actual competitor, Consumers claimed in summary fashion
that the acquisition would eliminate SAB as a “potential
competitor.” (Emphasis added). The claim is doomed from
the start because the potential competitor theory lacks factual
allegations in the complaint. Indeed, by alleging that ABI
and SAB were actual competitors, Consumers undermine
their assertion that the brewers were potential competitors.
Taking Consumers’ factual allegations as true, as we must at
this stage, SAB was not a potential competitor with ABI.
See In re Tracht Gut, LLC, 836 F.3d 1146, 1150 (9th Cir.
2016) (we accept as true all factual allegations in the
complaint, but “do[] not have to accept as true conclusory
allegations in a complaint”). Instead, before the transaction
and divestiture, SAB was an actual competitor through its
joint venture MillerCoors.

    Consumers’ effort on appeal to recast SAB as a
“potential competitor . . . so positioned on the edge of the
market that it exerted beneficial influence on competitive
conditions in the market” fails. United States v. Falstaff
Brewing Corp., 410 U.S. 526, 532–33 (1973). SAB was not
poised on the edge of the market “continually threatening to
enter.” United States v. Penn-Olin Chem. Co., 378 U.S. 158,
173 (1964). Nor was SAB “eager[] to enter that market.”
United States v. El Paso Nat. Gas Co., 376 U.S. 651, 660
(1964). SAB had already entered the market, through the
MillerCoors joint venture. SAB’s beneficial influence on
competitive conditions in the market thus was through
MillerCoors, an entity still competing in the market today.
12               DEHOOG V. ANHEUSER-BUSCH

    Consumers did not allege in their complaint that SAB
was a potential competitor because of “the ever-looming
threat of the possible end of the [SAB-Molson] joint venture
[MillerCoors] and the resulting re-entry of the parents.” But
such a claim also would be futile because allegations
regarding the potential dissolution of MillerCoors and its
competitive effects would be entirely speculative. See
Twombly, 550 U.S. at 555.

     C. ALLEGATIONS    CONCERNING      THE  NEW
        MILLERCOORS’ DISTRIBUTION PRACTICES ARE
        TOO SPECULATIVE TO STATE A CLAIM

    Consumers make one last speculative argument: Post-
transaction, MillerCoors—now a wholly-owned subsidiary
of Molson—will adopt the distribution practices of ABI.
Consumers provide no support for that assertion. 9 Merely
stating that “it is likely that a 100 percent Molson Coors-
owned MillerCoors will follow ABI’s lead in its dealings
with distributors,” without more, is insufficient. See Iqbal,
556 U.S. at 678 (emphasizing that “labels and conclusions”
are not enough to survive a motion to dismiss). This

     9
       After briefing on the motion to dismiss, Consumers filed a
supplemental declaration with an attached letter written by the American
Antitrust Institute regarding potential post-merger coordination in the
U.S. beer market. That letter was not incorporated into the complaint.
Regardless, the letter was addressed to the DOJ Antitrust Division to
encourage the agency to order pro-competitive remedies if it approved
the merger, some of which the DOJ adopted in its settlement agreement
with ABI. See Press Release, U.S. Dep’t of Justice, Justice Department
Requires Anheuser-Busch InBev to Divest Stake in MillerCoors and
Alter Beer Distributor Practices as Part of SABMiller Acquisition
(July 20, 2016), available at https://www.justice.gov/opa/pr/justice-
department-requires-anheuser-busch-inbev-divest-stake-millercoors-
and-alter-beer.
                 DEHOOG V. ANHEUSER-BUSCH                           13

allegation is a classic speculative conclusion. General
allegations regarding past acquisitions in the market, which
prompted distinct DOJ remedies, do not alter the equation.
The bottom line is that the complaint offers only speculation
as to how a MillerCoors operated solely by Molson, as
opposed to by Molson and SAB, will do business. 10 Such
speculation “stops short of the line between possibility and
plausibility of entitlement to relief.” Twombly, 550 U.S. at
557 (alteration and internal quotation marks omitted). 11

    In view of our conclusion that Consumers do not have a
viable Clayton Act claim, we need not reach Consumers’
claim for injunctive relief.

II. THE DISTRICT COURT DID NOT ABUSE ITS
    DISCRETION IN DISMISSING THE COMPLAINT WITH
    PREJUDICE

     The only remaining question is whether Consumers’
complaint could be “saved by amendment.” Kendall v. Visa
U.S.A., Inc., 518 F.3d 1042, 1051 (9th Cir. 2008).
Ultimately, the district court did not abuse its discretion in
concluding that Consumers could not plead around the
elephant in the room. See Missouri ex rel. Koster v. Harris,
847 F.3d 646, 655–56 (9th Cir. 2017). Since SAB divested
its interests in the U.S. beer market, the transaction could not
increase ABI’s market share or the concentration of that
market. As the district court aptly observed, the DOJ

    10
       Molson is not a defendant in this action. But if Molson conducts
its MillerCoors business in the U.S. beer market in violation of the
antitrust laws, it does so at the risk of private and public antitrust
enforcement suits.
     11
        Consumers do not appeal the district court’s decision that
allegations about ABI’s buying power are too speculative.
14             DEHOOG V. ANHEUSER-BUSCH

reached a settlement to “prevent increased concentration” in
the market. While Consumers contend that the settlement
only partially remedies their alleged injuries, they curiously
did not submit public comments opposing the settlement, as
they were entitled to do. See 15 U.S.C. § 16(d).

    Consumers’ new arguments on appeal underscore that
any amendment to their complaint would be futile.
Consumers argue that they would add factual allegations
regarding SAB’s role in the relevant market managing
MillerCoors as a joint venture, or (perhaps contradicting
themselves), on the “edge of the market.” Given the legal
deficiencies in applying the “actual competitor” and
“potential competitor” theories to the present facts, further
allegations would not salvage the complaint.

    Consumers also assert that they would add allegations
regarding the closing of a MillerCoors brewery in Eden,
North Carolina in September 2015.              According to
Consumers, the shuttered brewery once brewed on a contract
basis for competitor Pabst and its closure “increased market
concentration to presumptively illegal levels.” However,
Consumers do not explain why a brewery closed by
MillerCoors months before ABI announced its proposed
acquisition of SAB has anything to do with the merger, as
opposed to being merely the product of MillerCoors’
independent business judgment. The weakness of these
proposed amendments underscores that the district court was
within its discretion to dismiss the complaint with prejudice.

     AFFIRMED.
