US: Anheuser-Busch InBev Modelo delay to hit FY estimates - analyst
It now appears unlikely that Anheuser-Busch InBev will close its purchase of Grupo Modelo by the end of March
With Constellation Brands applying late last week to be included in the US Department of Justice's legal case against A-B InBev's proposal, the row is now expected to run beyond A-B InBev's intended completion date. In announcing its intention to buy the other 50% of Modelo, in June, the brewer said it hoped to complete the deal in the first quarter of this year.
In a note to clients today (11 February), however, Ian Shackleton at Nomura flagged the unlikelihood of that deadline being hit.
“There is significant risk of slippage on the deal over several quarters, which is set to lead to lower FY13 consensus estimates,” said Shackleton.
A-B InBev would appear to have “misread the regulatory climate for US beer”, Shackleton added, as he drew comparisons to the brewer's attempts to consolidate two of the major UK brewers, Bass and Whitbread, in 2000.
“The Office of Fair Trading (in the UK) ruled that it was not able to keep both businesses and (A-B InBev) ended up selling most of the Bass business (Carling) to Molson Coors,” Shackleton noted. “It was clear that the company had misread the regulatory position in the UK.”
A-B InBev followed Constellation's announcement on Friday with a statement backing its application.
- Diageo's Q4/FY 2016 results - Preview
- Wine consumption and its health effects
- Can craft breweries compete in lager arena?
- The Coca-Cola Co's Q2/H1 2016 results - Preview
- Time to take stock of Constellation's Corona
- Diageo names new TR head as Doug Bagley exits
- AB InBev seeks single buyer for European beers
- Gruppo Campari trials Negroni pre-mix
- Scotch drop hits Edrington as FY profits fall
- AB InBev raises SAB cash offer by GBP1 per share
- Global RTD insights - market forecasts, product innovation and consumer trends
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Global travel retail insights - market forecasts, product innovation and consumer trends