US sues to block $20 bn AB InBev takeover of Modelo

US antitrust authorities filed suit Thursday to block the $20.1 billion takeover of Mexican brewer Grupo Modelo by Belgian-US giant Anheuser-Busch InBev.

The US Justice Department said the suit “seeks to prevent the companies from merging and to preserve the existing head-to-head competition between the firms that the transaction would eliminate.”

“If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers,” said Bill Baer, the assistant attorney general who heads the Justice Department’s anti-trust division.

“This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry.”

The Justice Department said that ABI and Modelo together control about 46 percent of annual beer sales in the United States.

The two companies proposed the merger last June, quickly raising worries over consolidation in the beer market.

In a statement, ABI criticized the suit as “inconsistent with the law, the facts and the reality of the market place.”

“We remain confident in our position, and we intend to vigorously contest the DOJ’s action in federal court. Given today’s development, we no longer expect the deal to close during the first quarter of 2013.”