JD Sues to Halt ABI/Modelo Deal

The Justice Department has filed a lawsuit to stop InBev’s proposed purchase Modelo of, which

The $20.1 billion deal would combine the #1 brewer in the US with the #1 import Corona. Now that is a lot of market share!

The government said the deal could lead to higher beer prices in this country because it would substantially reduce competition in the beer market.

InBev said this morning that they would fight in suit.

MillerCoors, the second-largest beer company, accounts for 29 percent of nationwide sales.

Comments

  1. sopbeer says

    Can the DOJ do this? I believe InBev was Belgian/Brazilian owned and Modelo Mexican. So what jurisdiction does the DOJ have to prevent the deal since neither are American companies? Maybe only because there is till brewing going on here in the US they can prevent the deal, seems a little like the US will loose to me and waste a lot of tax payer money in the process.

  2. nateo says

    sopbeer;92756 wrote: Can the DOJ do this? I believe InBev was Belgian/Brazilian owned and Modelo Mexican. So what jurisdiction does the DOJ have to prevent the deal since neither are American companies?

    http://blogs.wsj.com/law/2013/01/31/doc-dump-ab-grupo-antitrust-lawsuit/

    See section II, JURISDICTION, VENUE, AND INTERSTATE COMMERCE

    The rules about where/how you can sue companies varies a bit, depending on who is suing whom. The parties in question can consent to go to trial in a given venue, as Modelo has done. There also may be statutes allowing suit to be brought in a certain venue, as in the Clayton Antitrust Act, section 12: “Any suit, action, or proceeding under the antitrust laws against a corporation may be brought not only in the judicial district whereof it is an inhabitant, but also in any district wherein it may be found or transacts business; and all process in such cases may be served in the district of which it is an inhabitant, or wherever it may be found.”