The Justice Department filed a lawsuit today to stop Anheuser-Busch InBev's proposed $20.1 billion purchase of Mexican brewer Grupo Modelo, which would unite the ownership of popular beers like Budweiser and Corona. The government said the deal could lead to higher beer prices in the US because it would substantially reduce competition in the domestic beer market, particularly in 26 metropolitan areas. It said the merged firm would control nearly half the beer sales in the US.
In response, Anheuser-Busch InBev promised a court fight to preserve its deal. ABI is the largest brewer of beer sold in the US and Modelo is the third—together, they control about 46% of annual sales in the US. MillerCoors, the second-largest beer company, accounts for 29%. "What we saw was a pattern of behavior" in which the "big folks were working hard to get price increases and Modelo was a significant constraint" on that behavior, says a Justice Department antitrust official. (Read more beer stories.)