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AB Inbev, U.S. Ask Judge for More Time for Modelo Talks

Anheuser-Busch Inbev NV (ABI) and the U.S. Justice Department told a federal judge they want to postpone until April 9 the government’s antitrust lawsuit to block its purchase of Grupo Modelo SAB, citing “substantial progress” toward settlement of the case.

In a joint court filing yesterday in Washington, AB InBev and the government said the talks are based on a revised proposal to sell control of all Modelo brands in the U.S., and a brewery in Mexico, to Constellation Brands Inc. (STZ)

“The parties request additional time to continue their discussions and, should the parties reach a resolution, complete the necessary court filings pursuant to the Antitrust Procedures and Penalties Act,” according to the filing.

Constellation and Crown Imports LLC, which had filed to intervene in the case, agreed to April postponement, according to the filing.

The Justice Department is reviewing Constellation’s plan to boost brewing capacity by about 70 percent at the Piedras Negras plant, now owned by Modelo, to ensure it can keep Modelo-brand products as a viable competitor in the U.S. beer market, said two people familiar with the matter who asked not to be named because the talks are confidential.

U.S. District Judge Richard Roberts earlier granted a request by the parties to delay the case until March 19, ordering them to report on progress toward a settlement or to begin setting a litigation schedule.

The revised deal, submitted on Feb. 14, is aimed at appeasing U.S. authorities, who sued to block Leuven, Belgium- based AB InBev’s proposed $20.1 billion purchase of the rest of Mexico City-based Modelo, arguing the merger would hurt competition and lead to higher prices. AB InBev, the world’s biggest brewer, controls almost half the U.S. beer market, while Corona is the country’s biggest imported brand.

The case is U.S. v. Anheuser-Busch InBev NV, 13-cv-00127, U.S. District Court, District of Columbia (Washington).

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To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net; Sara Forden in Washington at sforden@bloomberg.net

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