InBev announces full control of Corona beer firm

US antitrust authorities sued Thursday to block the $20.1 billion takeover of Mexican brewer Grupo Modelo by Belgian-US giant Anheuser-Busch InBev, saying the combined firm would have too much power over the US beer market.

WASHINGTON – The U.S. Justice Department has filed a lawsuit seeking to stop Anheuser-Busch InBev SA from buying the half of Mexican brewer Grupo Modelo that it does not already own, saying the US$20.1-billion deal would lessen competition in the U.S. beer market. Trading in Constellation Brands, which would have become sole owner of the company that distributes Modelo’s Corona beer in the United States if the transaction had been approved, was halted after it dropped 23.8%.

Anheuser-Busch InBev (ABI) has about a billion reasons to propose a toast.   The Belgium-based brewer of Budweiser and Stella Artois believes it could realize as much as $1 billion in cost synergies from its proposed acquisition of the 50 percent share of Grupo Modelo, the Mexican brewer, that it does not already own.  

Though Anheuser-Busch InBev may have failed in its Worst Company In America battle against Electronic Arts, the beer behemoth is getting much closer to owning even more big-name beer brands, saying it has reached an agreement in principle with the Dept. of Justice that would allow it to acquire the rest of Mexico’s Grupo Modelo.

Anheuser-Busch InBev and Mexican brewing giant Grupo Modelo were all set to merge and form Voltron one of the biggest beer companies on Earth, until the U.S. Justice Department stepped in.

By David Silver:The largest brewer in the world, Anheuser-Busch InBev (BUD), announced on June 29 that it agreed to purchase the remaining 50% of Grupo Modelo for a whopping $20.1 billion.

By Zvi Bar:On January 31, the U.S. Department of Justice filed a lawsuit to block the proposed $20.1 billion purchase of Grupo Modelo (GPMCY.PK) by Anheuser-Busch InBev (BUD), claiming that the deal would hurt competition and raise prices.

(SoCalMetro)