U.S. Justice Department Sues to Block Merger That Would Unite Budweiser and Corona


Written by Don Cazentre for syracuse.com

The U.S. Justice Department today filed a lawsuit to block brewer Anheuser-Busch InBev from completing a takeover of Grupo Modelo, the Mexican brewing company that makes Corona among other beers.

Anheuser-Busch InBev already has a 50 percent stake in Modelo. The maker of Budweiser, Bud Light and other brands wants to spend $20.1 billion to purchase the remainder.

The Justice Department is concerned the proposed new company would violate anti-trust laws, and could lead to higher beer prices.

The move has several Central New York ripple effects:

Anheuser-Busch InBev operates a brewery just outside of Baldwinsville. It is one of 12 U.S. A-B InBev breweries. Shares of A-B InBev stock dropped after the lawsuit was filed.

Shares of Canandaigua-based Constellation Brands also plummeted. That’s because, as an attempt to avoid anti-trust problems in the Modelo deal, A-B InBev has pledged to sell some its assets to Constellation, which has one of the world’s largest wine and beer portfolios. The Justice lawsuit said the move of assets to Constellation would not prevent the anti-trust problems.

One Reply to “U.S. Justice Department Sues to Block Merger That Would Unite Budweiser and Corona”

  1. About bloody time. I was beginning to think we no longer had laws against mergers or sales that created monopolies. Maybe if they had been on the ball earlier satellite radio would be more than a one corporation act.

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