International Megacorp Anheuser Busch InBev looks to be ready to take over the 49.6% of Grupo Modelo that it doesn’t already own. The deal should be about $15 billion. While ABIB owns the majority of shares, the Modelo families still hold the majority of votes.
Corona, of course, is the big draw here, and ABIB would save a lot by not needing a partner to import it. And let’s not forget the 2-3% annualized growth in the Mexican market. Sales of industrial brewed American light lagers have been in the doldrums for a few years now.
Mexico is the world’s sixth biggest beer market and the fourth most profitable and is a virtual duopoly between Modelo and Heineken. Analysts say it would be a good strategic deal for AB InBev.
Analysts said AB InBev taking on the import rights for Corona beer in the U.S. could cause anti-trust
Corona is currently imported into the U.S. through a joint venture with Constellation Brands in an agreement which runs until 2016, and if AB InBev wanted to break this deal early then it would have to pay Constellation compensation.problems in the U.S. because of its high market share, but said it could get around this by selling off some of its smaller beer brands.
I expect the deal to go through, since it will only require a few minor brands be sacrificed. Who’d possibly miss them, right?
I just can’t help thinking that instead of buying out another megabrewer (and quasi-competitor) wouldn’t it be better if they took that $15 billion and used it to make better beer?