It’s always big news when two industry superpowers come together. Last year it was SABMiller buying out Australian beer producer Foster’s, albeit after a three month power struggle. This year the big story is global beverage titan Anheuser-Busch InBev buying out the remaining shares of Grupo Modelo that it doesn’t already own. The move, which will take AB InBev from being partners with Grupo Modelo to full-blown owner, didn’t come cheap: at $9.15 USD per share, the buyout is valued at $20.1 billion – that’s $278.6 billion MXN, a pretty penny any way you slice it.
Considering that AB InBev owned more than 50 percent of shares in Grupo Modelo already, it’s not that this was a particular surprising business decision. It also won’t reportedly cause a massive overhaul for Grupo Modelo – the company will retain its name and its headquarters in Mexico. It will, however, gain a boost for Corona as it joins the ranks of Budweiser, Beck’s, and Stella Artois as an AB InBev global flagship brand. Besides more opportunities to have Grupo Modelo’s brands recognized globally, AB InBev is also anticipating more opportunities to sell its brands to the growing Latin American market.
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In other words, both brands appear excited about the opportunities that will be afforded by this full merger. AB InBev CEO Carlos Brito told Beverage Daily:
“The beauty of this new enriched portfolio is that these brands complement each other in terms of position… It’s a win-win for everybody.”
Meanwhile, in a press release Grupo Modelo Chairman and CEO Carlos Fernandez stated:
“This is an exciting transaction that will bring our brands and proud heritage to even more consumers internationally while offering an increasing number of AB InBev’s brands in Mexico. Grupo Modelo’s Board believes that this combination will deliver significant benefits for all stakeholders.”
According to reports, AB InBev hopes that this merger will result in $600 million annually. Both AB InBev and Grupo Modelo expect for the deal to close in the first fiscal quarter of 2013.
[SOURCE: Beverage Daily]