DoJ blocks Bud's purchase of Modelo
WASHINGTON The Justice Department is challenging Anheuser-Busch InBev's proposed $20.1 billion purchase of Mexican brewer Grupo Modelo, which would unite the ownership of popular beers like Budweiser and Corona.
The government says the deal would substantially reduce competition in the U.S. beer market, particularly in 26 metropolitan areas.
Americans spent at least $80 billion on beer last year. ABI's Bud Light is the best-selling beer in the nation and Modelo's Corona Extra is the best-selling import.
The Justice Department's lawsuit in federal court in Washington, D.C., seeks to prevent the merger and to continue competition between the firms.
Bill Baer, the assistant attorney general for the department's antitrust division, says ABI would be able to increase beer prices to U.S. consumers if the merger were to go through.
Anheuser-Busch InBev (BUD) lost nearly 7 percent. Grupo Modelo shares, traded in Mexico City, shed nearly 7 percent as well.
Constellation Brands (STZ) plunged 20 percent. Today's action harms the chances of Constellation's related $1.85 billion deal that would give it greater U.S. control of Corona and other beers. Constellation was to buy the remaining half of a joint venture with Grupo Modelo, Crown Imports LLC, that imports Modelo beers into the U.S. The deal with Constellation was intended to alleviate antitrust concerns, but the Justice Department said that it wasn't enough to protect U.S. beer buyers.
Popular on MoneyWatch
- How to stop the mediocrity pandemic
- Seeking solutions to the student aid mess
- Reverse cell phone lookup service is free and simple
- LinkedIn: 3 tips for building a better profile
- Amy's Baking Company: Post-meltdown PR campaign
- Kellogg re-inventing Special K brand
- Top 10 professional life coaching myths
- Lawmakers say Apple dodged billions in taxes