US Justice Department tries to block ABI's Modelo takeover

The US has stepped in the middle of Anheuser-Busch Inbev's (ABI) $20bn (£13bn) deal to buy up the Mexican brewery business Grupo Modelo, with federal lawyers filing a suit claiming the move would hit competition in the American beer market.

The deal would bring together two of the most successful beer brands in the US, namely ABI's Bud Light, and Grupo Modelo's Corona Extra.

ABI, which already owns half of Grupo Modelo, said it would buy up the remainder for $20.1bn, while in a related transaction that was meant to answer any anti-trust concerns on the part of American regulators, Modelo said it would sell its share of Crown Imports, a pre-existing US joint venture, to its partner, Constellation Brands.

But now the Justice Department has challenged the deal.

"The department is taking this action to stop a merger between major beer brewers because it would result in less competition and higher beer prices for American consumers," said Bill Baer, an assistant US Attorney General. "If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers."

Mr Baer added that the "attempt to fix this anti-competitive deal" by having Modelo divest its stake in Crown was "not sufficient".