Regulator Challenges Modelo Sale

The US Department of Justice has filed suit to block the $20bn acquisition of 50% of Mexican brewer Grupo Modelo agreed last year, buyer AB Inbev says. The challenge to the deal – LatAm’s biggest announced M&A transaction in 2012 – is mainly based on AB Inbev’s ability to charge consumers more if it controls both the Corona and Budweiser brands, two of the most popular in the US market. At the very least, it is a setback to the parties’ original plans to close the deal by the end of March. After four years of AB Inbev owning an initial 50% of Modelo and long discussions for the other half, the two sides agreed on the deal in July. Morgan Stanley advised Modelo, while Deutsche Bank, Lazard, Barclays, JPMorgan and Bank of America Merrill Lynch advised AB InBev. The move is “inconsistent with the law, the facts and the reality of the market place,” AB Inbev says, vowing to contest the action while noting that closing should be delayed.