The Justice Department on Thursday sued to block Anheuser-Busch InBev‘s proposed $20.1 billion deal to buy control of Grupo Modelo of Mexico, arguing that the merger would significantly reduce competition in the American beer market.
Announced last summer, the deal would add Corona Extra to its formidable stable of brands, including Budweiser and Stella Artois.
But the Justice Department said in its lawsuit, filed in federal district court in Washington, that allowing the merger to proceed would reduce competition within the beer industry across the country as a whole and in 26 metropolitan areas in particular. The combined company would own about 46 percent of annual sales in the country, the government said, far outpacing Anheuser-Busch InBv’s closest competitor, MillerCoors.
“If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers,†Bill Baer, the head of the Justice Department’s antitrust division, said in a statement. “This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry.â€
The deal is the biggest for the Justice Department to oppose since 2011, when it sued to block AT&T‘s proposed $39 billion takeover of T-Mobile USA. And the government’s move is the first significant effort to halt widespread consolidation within the beer industry in some time. Anheuser-Busch InBev itself was the product of a blockbuster merger between two of the world’s biggest breweries, and one of Miller Coors’ parents is the acquisitive SABMiller.
In its complaint, the Jus! tice Department said that Modelo has served as a low-price counterbalance to its larger competitors, resisting the price raises that Anheuser-Busch InBev has promoted regularly.
A spokesman for Anheuser-Busch InBev wasn’t immediately available for comment.
Justice Departments Lawsuit to Block Anheuser-Busch InBevs Deal for Grupo Modelo by
