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Earlier this month, the us Justice Department challenged a planned merger of a couple of the world’s biggest alcohol vendors. The merger was a projected $20.1 billion deal for Anheuser-Busch InBev to buy-out Mexico’s Grupo Modelo, the brewer of Corona and Modelo beer among others. The huge merger could allow Anheuser-Busch InBev a monopoly over a great number of America’s top selling beers. The U.S Justice Department has fought against the deal by stating that it would restrict competition and perhaps result in expanded alcohol prices in america. The deal would have merged the United States leading beer supplier with its 3rd best beer seller basically monopolizing the marketplace for Anheuser-Busch InBev.

The Planned Merger Deal

Anheuser-Busch InBev was getting ready to boost it’s currently substantial portfolio which include the brand names Budweiser, Bud Light, Stella, Becks and others with the acquisition of Grupo Modelos remarkable portfolio which include Corona Extra, Corona Light and Modelo. AB InBev already controls 49% of Grupo Modelo and was prepared to spend $20.1 billion to buy the remainder of shares inside the corporation. The U . S . Justice Department antitrust division argued against the merger and it seems for now at least the merger will not occur.

Very similar Monopolies Opposed Fairly recently

The antitrust department of the Justice Department has been very active in recent years challenging mergers they feel will damage the United states consumer. A year ago they battled a merger between the telecom giants AT&T together with T-Mobile which could have transformed the entire landscape of the mobile phone industry. The antitrust section of the Department of Justice acts as the watchdog over large business mergers in the nation which could limit the encouraged levels of competition between businesses.

Winners and Losers of AB InBev – Grupo Modelo Cancelled Deal

While the National public is probably the largest victor of this deal failing, there was plenty of losers in this deal. Both AB InBev and Grupo Modelo have lost huge with the merger falling through, but smaller sized companies also suffered. Constellation Brands, an additional top spirits producer which controlled the proper rights to distribute Grupo Modelo’s product in north america will more than likely lose out big when this merger falls through. As a part of the merger AB InBev had agreed to a long term deal with Constellation to enable them to keep having distribution rights of Grupo Modelo’s products in the United States.

There are more alcohol products in the states today, than any other time, still most of the largest brand names all fall under a couple of corporate umbrellas. Anheuser-Bush InBev, MillerCoors and Grupo Modelo manage the majority of sales of alcoholic beverages in the states. The rivalry among these corporations is essential to the United States consumers, because without it the rates would escalate. The U.S Department of Justice has halted a potentially devastating merger for the time being with the consideration of the American consumers in the centre of the argument.