The periodic Anderson model is extended by switching on a Hubbard U fo
r the conduction electrons. We use the Gutzwiller variational method t
o study the nearly integral valent limit. The lattice Kondo energy con
tains the U-dependent chemical potential of the Hubbard subsystem in t
he exponent, and the correlation-induced band narrowing in the prefact
or. Both effects tend to suppress the Kondo scale, which can be unders
tood to result from the blocking of hybridization. At half-filling, we
find a Brinkman-Rice-type transition from a Kondo insulator to a Mott
insulator.