The Department of Justice  filed the lawsuit against Anheuser-Busch InBev today

The Department of Justice filed the lawsuit against Anheuser-Busch InBev today

The US Department of Justice has moved to block Anheuser-Busch InBev's proposed takeover of Mexico's Grupo Modelo.

In a statement today (31 January), the DoJ said it has filed an anti-trust lawsuit against the US$20.1bn deal. It said the takeover, first announced last June, would “substantially lessen competition” in the US beer market, meaning consumers would pay more for beer and have less choice. 

The DoJ noted that A-B InBev's Bud Light is the US' best-selling beer, while Modelo's Corona Extra is the best-selling import. “Because of the size of the beer market in the United States, even a small increase in the price of beer could result in billions of dollars of harm to American consumers,” the DoJ said.

Bill Baer, assistant attorney general in charge of the Department of Justice’s anti-trust division, said: "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."

He added: “If A-B InBev fully owned and controlled Modelo, A-B InBev would be able to increase beer prices to American consumers. This lawsuit seeks to prevent A-B InBev from eliminating Modelo as an important competitive force in the beer industry.”  

The move is a major setback to A-B InBev's plans to capture the Mexican brewer. However, the Belgium-headquartered group struck a note of defiance. In a statement, it said the DoJ's action is “inconsistent with the law, the facts and the reality of the market place.”

It added: “We remain confident in our position, and we intend to vigorously contest the DOJ's action in federal court.”

Fears had been raised the deal would be affected by anti-trust concerns, but A-B InBev had previously insisted the deal would complete by the first calendar quarter. But it added: “Given today's development, we no longer expect the deal to close during the first quarter of 2013. We will comment further once we have reviewed the DOJ filing.” 

The DoJ's shock move also puts into doubt Constellation Brands' acquisition of Crown Imports. The California-based company was due to take full control of Crown by buying out its JV parner Modelo's stake. Shares in Constellation were today down by 20.4% at $31.17.