US: Anheuser-Busch InBev offers Grupo Modelo deal concessions
- Constellation Brands to keep Crown Imports in perpetuity
- Anheuser-Busch InBev to sell Modelo brewery to Constellation
The revised terms are a bid to see off the US DoJ's lawsuit
Under the new terms, announced today (14 February), Constellation will take the perpetual rights to Modelo's brands in the US and acquire the Mexican group's Compañía Cervecera de Coahuila brewery, in Piedras Negras, Mexico. Constellation has agreed to pay A-B InBev US$2.9bn for the brewery and Modelo's perpetual brand licences.
"This is a transformational acquisition for our company as we will hold perpetual rights to Corona and the Modelo brands distributed by Crown in the US," said Constellation Brands' CEO Rob Sands. "We will have autonomous control of production, distribution, marketing and promotion of these brands in the US."
Constellation's planned US$1.85bn acquisition of Modelo's 50% stake in Crown Imports, a JV between the Mexican brewer and the wine and spirits group, remains in place.
The companies said in a joint statment that, under the new terms, Constellation will be a "fully independent competitor in the US" to A-B InBev.
Carlos Brito, A-B InBev's CEO said the deal with Modelo has "always been about Mexico and making Corona more global in all markets other than the US, where the brands will be owned and managed by Constellation."
He added: "We are pleased to have reached this revised agreement that preserves the merits of the Grupo Modelo transaction while allowing us to move expeditiously to the Modelo integration process and the capture of approximately US$1bn of synergies, up from our original estimate of $600m."
A-B InBev's proposed $20.1bn acquistion of Modelo was thrown into doubt after the US Department of Justice filed an anti-trust lawsuit over the deal last month.
In today's statement, the companies said the revised agreement remains conditional on the Modelo deal being completed and is subject to regulatory approvals in the US and Mexico. A-B InBev's acqusition of Modelo also "remains subject to the existing challenge by the US Department of Justice", the companies noted.
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