US-based beverage company Constellation Brands has agreed to acquire a brewery in Obregon, Mexico from Grupo Modelo for $600m.

Constellation Brands will submit a proposal to the US Department of Justice for the acquisition.

The deal will be subjected to customary closing adjustments and regulatory approvals.

"We believe this is the right strategy to provide near-term capacity and greater flexibility to support our growth and innovation plans."

The acquisition of the Obregon brewery allows Constellation to immediately secure functioning brewery capacity to support its growing Mexican beer portfolio and offers flexibility for future innovations.

It also allows the firm to become completely independent from the interim supply agreement with Grupo Modelo. Constellation, as a result, will phase the buildout of ten million hectoliters at Mexicali, with the first five million hectoliters of production capacity expected to become operational by December 2019, and subsequent capacity planned to align with future growth.

Constellation Brands president and chief executive officer Rob Sands said: "We believe this is the right strategy to provide near-term capacity and greater flexibility to support our growth and innovation plans, while allowing for the buildout of our Mexicali brewery over an extended time period.

"We look forward to welcoming Obregon's talented employees to our Constellation family and working together to continue to capture the ongoing growth opportunities we see in the high-end segment of the US beer market."

The Mexican brewery is situated in the west coast and will support Constellation's beer markets in the western US.