Photo: By potentialpast on Flickr
Shares of Constellation Brands are down 20.5 per cent in the intraday session and trading in the stock has been halted.The U.S. Department of Justice is suing to block global beverage giant InBev’s proposed purchase of Grupo Modelo – the Mexican brewer that has a joint venture with Constellation Brands to import Corona to the United States – on antitrust grounds.
Constellation Brands just released a statement saying they no longer expect the deal to close in the first quarter of 2013.
Bloomberg has the details on the suit:
Shares of both companies plunged after the Justice Department filed a complaint today in federal court in Washington, arguing the transaction violates antitrust law because it would eliminate the “substantial head-to-head competition” that exists between InBev and Modelo.
“If ABI fully owned and controlled Modelo, ABI would be able to increase beer prices to American consumers,” Bill Baer, the head of department’s antitrust division, said in a statement. “This lawsuit seeks to prevent ABI from eliminating Modelo as an important competitive force in the beer industry.”
Trading in the stock has already been halted by automatic circuit-breakers multiple times in this morning’s session.