Like The Herald Business Journal on Facebook!
The Herald of Everett, Washington
Heraldnet.com

The top local business stories in your email

Contact Us:

Josh O'Connor
Publisher
Phone: 425-339-3007
joconnor@heraldnet.com

Maureen Bozlinski
General Sales Manager
Phone: 425-339-3445
Fax: 425-339-3049
mbozlinksi@heraldnet.com

Jim Davis
Editor
Phone: 425-339-3097
jdavis@heraldnet.com

Site address:
1800 41st Street, S-300,
Everett, WA 98203

Mailing address:
P.O. Box 930
Everett, WA 98206

HBJ RSS feeds

Budweiser owner buys up Corona maker

Anheuser-Busch InBev's purchase of Grupo Modelo will give it annual sales of $47 billion and 150,000 employees.

SHARE: facebook Twitter icon Pinterest icon Linkedin icon Google+ icon Email icon |  PRINTER-FRIENDLY  |  COMMENTS
By Toby Sterling
Associated Press
Published:
  • A customer places a case of Corona Extra on the checkout counter for purchase at Susquehanna Beer and Soda in Marysville, Pa.

    Associated Press

    A customer places a case of Corona Extra on the checkout counter for purchase at Susquehanna Beer and Soda in Marysville, Pa.

  • Anheuser-Busch InBev SA, maker of Budweiser beer, agreed Friday to buy the half of Corona maker Grupo Modelo it doesn't already own for $20.1 billion ...

    Associated Press

    Anheuser-Busch InBev SA, maker of Budweiser beer, agreed Friday to buy the half of Corona maker Grupo Modelo it doesn't already own for $20.1 billion in cash.

  • Anheuser-Busch InBev SA, maker of Budweiser beer, agreed Friday to buy the half of Corona maker Grupo Modelo it doesn't already own for $20.1 billion ...

    Associated Press

    Anheuser-Busch InBev SA, maker of Budweiser beer, agreed Friday to buy the half of Corona maker Grupo Modelo it doesn't already own for $20.1 billion in cash, in a deal that will greatly increase the size and dominance of the world's largest brewer.

BRUSSELS -- Anheuser-Busch InBev agreed Friday to buy the half of Corona maker Grupo Modelo it doesn't already own for $20.1 billion in cash, in a deal that will greatly increase the size and dominance of the world's largest brewer.
The acquisition would bring under one company many of the world's best-known beer brands -- Corona, Modelo and Pacifico would join AB InBev's Budweiser, Beck's and Stella Artois, among others.
The combined company would have annual sales of $47 billion, and employ 150,000 workers in 24 countries.
AB InBev, based in Leuven, Belgium, said in a statement it has agreed with Modelo's management to pay $9.15 per share for the company, a 30 percent premium to the Mexican company's share price just before news of a possible deal came out on June 22.
The companies said the agreement was a "natural step," in light of AB InBev's current stake in Modelo.
"Grupo Modelo has been one of our most important partners for more than 20 years and we are very pleased to evolve our long and successful relationship into this combination," said AB InBev CEO Carlos Brito. "There is tremendous opportunity from combining two leading brand portfolios and further expanding Grupo Modelo's brands worldwide through AB InBev's extensive global distribution network."
Analysts said AB InBev appears to have paid highly for Modelo, but the deal makes strategic sense.
"This is likely to lead to higher margins for Modelo," said SNS Securities analyst Richard Withagen in a note. He said AB InBev will move rapidly to introduce more of its brands into the Mexican market.
"As a result, competition in the Mexican market is likely to remain fierce going forward."
Modelo has a share of around 56 percent of the Mexican beer market, while rival Dutch brewer Heineken NV controls around 41 percent, with brands such as Dos Equis and Tecate.
Shares in AB InBev SA rose 3.9 percent to close at $76.42 in Brussels, while shares in Grupo Modelo, SAB de CV, were up 0.6 percent in Mexico City.
AB InBev said it expects the companies will save $600 million annually by combining operations. Regulators around the world, but most importantly in Mexico and the U.S. must approve the deal. AB InBev said it expects the deal to close during the first quarter of 2013.
In a related deal, Modelo agreed to sell its 50 percent stake in distributor Crown Imports LLC to its partner, winemaker Constellation Brands Inc. of New York, for $1.85 billion.

Story tags » Alcohol

MORE HBJ HEADLINES

CALENDAR

Share your comments: Log in using your HeraldNet account or your Facebook, Twitter or Disqus profile. Comments that violate the rules are subject to removal. Please see our terms of use. Please note that you must verify your email address for your comments to appear.

You are logged in using your HeraldNet ID. Click here to update your profile. | Log out.

Our new comment system is not supported in IE 7. Please upgrade your browser here.

comments powered by Disqus

Market roundup