Last updated: February 20, 2013 11:55 pm

AB InBev delays suit over Modelo deal

Anheuser-Busch InBev and the US Department of Justice agreed on Wednesday to delay litigation and engage in discussions involving the brewer’s proposed $20bn acquisition of Grupo Modelo.

Last month the US moved to block the deal, arguing that it would lead to price increases, harm consumers and deter competition.

AB InBev promised to fight the lawsuit but earlier this month made concessions in hopes of moving the deal forward. AB InBev agreed to sell its Piedras Negras brewery and grant perpetual licenses of Corona and other Modelo brands to Constellation Brands, which can sell them in the US.

“The plaintiff is investigating whether the revised transaction resolves the competitive concerns alleged in the complaint,” the DoJ said in court filing.

AB InBev, the world’s largest brewer by revenues, already controls a 50 per cent stake in Modelo and regulators argued that because the combined company would control 46 per cent of the market the deal would harm smaller competitors.

Craft brewers have been fearful that if AB InBev has more leverage with distributors it will make it more difficult for them to get their products on the shelves at retailers.

AB InBev, Constellation and Modelo all warned that the discussions with the DoJ could still fall through.

The litigation is delayed until March 19.

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