DOJ mulls revised beer company merger, puts brakes on antitrust lawsuit

The Justice Department is moving to postpone its play to block the proposed merger of two beer industry giants, while attorneys review new terms meant to allay concerns that the deal would increase costs to consumers.

The agency’s Antitrust Division filed a lawsuit in federal court last month to challenge Anheuser-Busch InBev’s (ABI) acquisition of Grupo Modelo. Officials argued that the $20.1 billion deal could cost drinkers billions of dollars because it would lessen competition between the two companies.

ABI, producer of Budweiser and Bud Light, and Modelo, brewer of Corona and other products, are, respectively, the first and third largest players in the beer industry.

Even an incremental increase in the costs of popular beers could have a significant impact on a marketplace that saw $80 billion in sales last year, the Justice Department argued.

Two weeks after the suit was filed in the U.S. District Court for the District of Columbia, the companies offered a modified plan under which ABI would sell off a brewery that currently produces certain Grupo Modelo beers. The buyer, Constellation Brands, Inc., would be granted perpetual brand licenses for Grupo Modelo brands in the U.S., along with other assets.

“The Antitrust Division is investigating the revised transaction,” Justice Department spokeswoman Gina Talamon said.

In the meantime, Justice and the defendants have requested a stay of the case until March 19.

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