Femsa Cerveza Company

Two prominent brewers, based in Canada and Mexico, said Wednesday they have agreed to merge their U.S. units and market each other's brands, joining forces to compete more effectively under free trade rules in the vast North American beer market. According to the deal, John Labatt Ltd., Canada's second-largest beer company, will also acquire for $510 million a 22% stake in FEMSA Cerveza, Mexico's largest brewer.

Two prominent brewers, based in Canada and Mexico, said Wednesday they have agreed to merge their U.S. units and market each other's brands, joining forces to compete more effectively under free trade rules in the vast North American beer market. According to the deal, John Labatt Ltd., Canada's second-largest beer company, will also acquire for $510 million a 22% stake in FEMSA Cerveza, Mexico's largest brewer.