Anheuser-Busch InBev SA (EBR:ABI) vowed Thursday to fight a U.S. Justice Department lawsuit seeking to block InBev from buying Mexico's Grupo Modelo de CV, which brews such popular brands as Corona Extra, in a $20.1 billion all-cash deal.

Word of the government's lawsuit against the deal slashed by more than 20 percent shares of Constellation Brands, Inc. (NYSE:STZ), which because of a planned side deal would have become sole owner of the company that distributes Modelo's Corona beer in the U.S. 

The U.S. Justice Department said Thursday the deal for InBev to buy the half of Modelo it doesn't already own, would lessen competition in the U.S. beer market.

“Today, Modelo aggressively competes head-to-head with (Anheuser InBev) in the United States” and that "competition has resulted in lower prices and product innovations that have benefited consumers across the country,” the Justice Department filing stated. “The proposed acquisition would eliminate this competition by further concentrating the beer industry, enhancing ABI’s market power, and facilitating coordinated pricing between ABI and the next largest brewer, MillerCoors, LLC.”

InBev, however, promised to fight the lawsuit, saying its claims are "inconsistent with the law, the facts and the reality of the marketplace."

In a side deal aimed at allaying Justice Department's anti-trust concerns, AB InBev and Modelo agreed to sell for $1.85 billion Modelo's 50 percent stake in a venture with Constellation that imports and markets Modelo brands in the U.S. If AB InBev is unable to buy out Modelo, then Constellation's plans to take over the Modelo distributorship in the U.S. is expected also to fail.

InBev holds a 47 percent stake in the U.S. beer market, while No. 2 MillerCoors, a joint venture of Molson Coors Brewing Co. and SABMiller PLC, holds a  28.4 percent market share, the Wall Street Journal said.