AB InBev Inks $20 Billion Deal to Acquire Grupo Modelo

BRUSSELS and MEXICO CITYAnheuser-Busch InBev reinforced its position as the worlds largest brewer today by inking a $20.1 billion cash deal to acquire full control of Grupo Modelo S.A.B. de C.V., the maker of Corona Extra beer. The transaction, subject to regulatory approvals, is expected to close during first quarter 2013.

AB InBev already owned 50% of Grupo Modelo. With full ownership, AB InBev plans to  make Corona one of its flagship global brands along with its Budweiser brand.

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 Modelos brands worldwide through AB InBevs extensive global distribution network."

Under the terms of the deal, Grupo Modelo will take a series of steps to "simplify Grupo Modelo's corporate structure," at which time A-B InBev will tender an all-cash offer for the shares, the companies said. A-B InBev said it expects the combination to yield annual synergies of at least $600 million.

Grupo Modelo's headquarters will remain in Mexico City, and the company will maintain a local board of directors. Two Grupo Modelo board members will join AB InBevs board of directors.

Founded in 1925, the Mexican brewer has 37,000 employees and brews and distributes 13 brands, including Corona, Modelo Especial, Victoria, Pacifico and Negra Modelo. A-B InBev, the world's largest brewer, has a portfolio of more than 200 brands and 116,000 employees. Combined, the two companies' annual revenue totals nearly $47 billion with operations spanning 24 countries and 150,000 employees globally.

In a related transaction announced today, Grupo Modelo will sell its existing 50% stake in Crown Imports, the joint venture that imports and markets Grupo Modelos brands in the United States to Constellation Brands for $1.85 billion, giving Constellation Brands 100% ownership and control.

As a result, Grupo Modelos brands will continue to be imported, marketed and distributed independently in the Untied States through Crown Imports on similar economic terms it receives today, while AB InBev will ensure the continuity of supply, quality of products and ability to introduce innovations. Crown Imports will continue to manage all aspects of the business, including making marketing, distribution and pricing decisions.