Anheuser-Busch and U.S. in Talks to Resolve Antitrust Concerns

Buying Grupo Modelo, which makes Corona beer, would extend Anheuser's reach in certain markets. Amy Sancetta/Associated PressBuying Grupo Modelo, which makes Corona beer, would extend Anheuser’s reach in certain markets.

8:45 p.m. | Updated

Anheuser-Busch InBev and the Justice Department said on Wednesday that they were in talks to resolve antitrust concerns over the beer maker’s planned deal with Grupo Modelo, the maker of Corona beer and other brands.

The parties said they had jointly requested a temporary stay of an antitrust suit filed by the Justice Department while they work through the options.

Last year, Anheuser-Busch InBev offered $20.1 billion to buy the part of Grupo Modelo that it did not already own. The deal, one of the biggest in the beverage industry, was meant to cap years of deal-making that transformed a small Brazilian brewer into a juggernaut that eventually swallowed the maker of Budweiser.

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The Grupo Modelo deal is a vital merger for Anheuser-Busch InBev, which has been seeking greater access to emerging markets. Buying Grupo Modelo, a Mexican brewer, is meant to solidify its footprint in attractive markets in Mexico and elsewhere in Latin America.

But the Obama administration filed suit on Jan. 31, seeking to block the deal on antitrust grounds. United States authorities said the original merger proposal would increase Anheuser-Busch InBev’s control of the American beer market, letting it raise prices while reducing choice for local consumers.

Grupo Modelo is the third-largest beer company in the United States. Anheuser-Busch InBev is the largest, ahead of MillerCoors.

Despite robust competition from microbrewers and other brands, analysts say the craft beer market makes up just 6 percent of beer sales. The biggest brewer in the market, Anheuser, has regularly raised its prices every year, with MillerCoors following suit, the Justice Department said.

Anheuser-Busch InBev first countered that the government’s lawsuit was based on faulty assumptions, since the company that determined Grupo Modelo’s prices in the United States was Grupo Modelo’s importer, Crown Imports.

Then, last week, Anheuser-Busch InBev offered broad concessions, saying it would sell the rights to Corona and other Grupo Modelo brands in the United States to Constellation Brands, one of the world’s largest wine companies, for $2.9 billion. Constellation already owns half of Crown Imports, alongside Grupo Modelo.

The new agreement would also include the sale of a brewery close to the United States-Mexico border that is owned by Grupo Modelo, as well as the perpetual licensing rights to Grupo Modelo’s brands in the United States.

In a statement on Wednesday, the Justice Department and the companies involved in the talks jointly requested a delay until March 19. Anheuser-Busch InBev and Grupo Modelo reiterated their contention that the “revised transaction resolves the concerns raised” by the antitrust suit.

The proposed deal for Grupo Modelo would be the second-largest takeover in the beer industry after the $52 billion merger that created Anheuser-Busch InBev, according to Thomson Reuters.