Grupo Modelo SA de CV Sells Stake To Anheuser-Busch InBev NV

By Adina Moloman

Sources: Reuters, The Wall Street Journal

In the middle of the presidential elections in Mexico, it comes the surprise announcement of the acquisition of Grupo Modelo SAB by the Belgium giant, Anheuser-Busch InBev NV.  The Belgian company already owns 50.4 percent of Modelo, Mexico’s No. 1 brewer.

Grupo Modelo brands includes Corona Extra, the best-selling imported beer in the U.S., as well as Modelo Especial and Pacifico.  AB InBev is the owner of Budweiser, Stella Artois beers Beck’s and about 200 other multi-country brands.

The surprising element was the apparent lack of reason for Modelo to sale its remaining stake to AB InBev, considering that is a Mexico Corporation with a robust financial health; last year the company registered total sales of 91.2 billion pesos ($6.53 billion). It’s a consolidated company in the beer industry well in the position to “buy” instead of selling, according to financial analysts and bankers.[1]

Additionally there was a fragile relationship between the two companies after an arbitration case (which was lost by the Mexican company) since the Mexican company was not consulted about InBev’s acquisition of Anheuser Busch in 2008 .

Grupo Modelo SAB closed the deal for a $20.1 billion.

A motivation other than money is to expand the reach of Modelo brands globally.

Not overlooked; Modelo shareholders could have sold a considerable percent stake in the Belgium brewer.

For Anheuser-Busch InBev NV with this acquisition will consolidate its position as the world’s biggest brewers. AB InBev is closing deals with big brewers looking for growth in emerging markets.

Anheuser-Busch InBev NV has an obvious strategy to penetrate into the fast-growing Mexican and the American continent market and thus avoiding facing competition issues in the US.

Both companies’ Boards of Directors have approved the transaction, which is expected to close during the first quarter of 2013.