Lawsuit Filed to Stop Merger of Corona and Bud

February 1, 2013

The U.S. justice department filed a lawsuit against Anheuser-Busch InBev’s $20.1 billion to purchase Mexican brewer Grupo Modelo. After the merger of the two ompanies, the ownership of the two popular beers like Corona and Budweiser will be united. Government smells a well-planned act in this decision of the two companies just to play monopoly in the beer market. Bringing to your notice, the merger firm controls about 46% of the total beer market in America. Merging of the two primary manufacturers of beer in America may decrease the competition in the market as being the controller of almost half of the country’s beer production, they may rise prices of these two beer products. In response to government’s action, Anheuser-Busch InBev promised to fight against the government. ABI is the largest brewer of beer in U.S. and Modelo is the third largest producer. The second largest producer of beer accounts for 29% of the production. The big folks in the beer industry were trying to raise the price of beer and Moelo was one of the restrictors for them. After the merger of it with API, the rise in beer prices would be a sure-shot thing. This is the reason why the Justice Department wants to prevent this merger.

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