Archives/Subscribe | February 12, 2013

Can the King of Beer Save the Modelo Deal?

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With the U.S. government standing in its way, can the King of Beer rescue its $20 billion deal to buy Mexico’s largest brewer? The Justice Department sued last week to block Anheuser-Busch InBev’s plan to buy full control of Grupo Modelo, the brewer of Corona beer. The Justice Department argues that the brewer’s pending deal to buy the half of Modelo it doesn’t already own violates the Clayton Act, passed in 1914 to block mergers and acquisitions that lessen competition. Though AB InBev already owns half of Modelo, the Mexican brewer structured the ownership stake in a way that allows Modelo to remain independent. Five years ago, Belgium based InBev bought St. Louis based Anheuser-Busch, while SABMiller PLC and Molson Coors Brewing Co. combined their U.S. and Puerto Rican operations. 

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