Anheuser-Busch Near Deal to Buy Rest of Modelo

by Christopher Freeburn | June 25, 2012 11:00 am

Anheuser-Busch Near Deal to Buy Rest of Modelo

Unnamed sources say Anheuser-Busch InBev (NYSE:BUD[1]) is in discussions to buy the remaining interest[2] in Mexican beer maker Grupo Modelo for $15 billion, Reuters reports.

Though Anheuser-Busch currently owns 50.4% of Grupo Modelo, its founding families still retain 56% of voting shares. Grupo Modelo filed suit against Anheuser-Busch in 2008 over its merger with InBev.

An acquisition of the remaining stake in Grupo Modelo would give Anheuser-Busch control over the best-selling imported beer in the U.S., Corona. It would also further concentrate Anheuser-Busch’s concentration on the Americas, which currently account for more than 90% of the company’s earnings.

Earlier this year, Anheuser-Busch purchased Dominican Republic-based Cerveceria Nacional Dominicana for $1.2 billion.

The Mexican beer market is split between Grupo Modelo and Heineken. Mexico is the world’s fourth most profitable country for beer. Analysts pointed out that acquiring Corona would cause problems with regulators, possibly forcing Anheuser-Busch to sell some of its lesser beer labels.

Sources told Reuters that Grupo Modelo’s family owners were inclined to sell, but were looking to extract a premium price for their half of the company.

Shares of Anheuser-Busch rose fractionally in Monday morning trading.

Endnotes:
  1. BUD: http://studio-5.financialcontent.com/investplace/quote?Symbol=BUD
  2. discussions to buy the remaining interest: http://uk.reuters.com/article/2012/06/25/us-modelo-abinbev-idUKBRE85O02L20120625

Source URL: http://investorplace.com/2012/06/anheuser-busch-near-deal-to-buy-rest-of-modelo/
Short URL: http://invstplc.com/1fzGkKR