Well, whatd’yaknow? It’s official! The New York Times DealBook blog reports today that Anheuser-Busch InBev will finally be purchasing the other half of Grupo Modelo for a cool $20.1 billion. I use the word “finally” because this was being considered way back in 2008. But a good deal just takes time, right?
Back in July 2008, Grupo Modelo’s stock price was hovering just below the 50 mark. Last month, its price was double that, and the recent rumors of a sale have boosted it even higher. Years ago, there was sabre-rattling over remaining independent, which most folks chalked up to trying to inflate the eventual sale price. The numbers you need to know, according to DealBook’s Andrew Ross Sorkin, are that A-BInBev “will pay $9.15 for each share of Grupo Modelo, a 30 percent premium to the company’s closing share price on June 22 before the deal was first reported. The brewers said the deal would create a company with combined annual revenue of $47 billion with operations in 24 countries and 150,000 employees.”
Because Grupo Modelo also had a 50% stake in Crown Imports, LLC (which handles importing, distributing, and marketing in the US), it will sell its half to its joint venture partner, Constellation Brands. Interestingly, they’re rolling up Dirección de Fábricas, a bottle manufacturer that mainly supplies Grupo Modelo, into the corporate structure.
Despite drastic wealth disparity within Mexico, its economic strength is only growing due to its geography and position as an emerging Western market, based on external desire for its natural resources (oil) and steady internal consumer demand. The World Bank predicts steady growth over time and a closing of the income gap within the country. From a brewing perspective, if you combine that demand with the aggregation of related goods and services (as in, bottle manufacturing), and you have another fine example of Carlos Brito’s continuing quest to make A-BInBev the leanest, meanest brewing conglomerate in the world.
What does this mean for the price of your Corona this summer? Hard to say, but you can rest assured that A-BInBev is dogged in its aggressive approach to maintaining top billing in an ever shrinking global industrial brewing market.