Constellation will now have a separate beer division

Constellation will now have a separate beer division

Constellation Brands is set to double its sales after completing the acquisition of Grupo Modelo's US beer business and one of its breweries from Anheuser-Busch InBev for US$4.75bn. 

The deal, confirmed late Friday (7 June), sees Constellation take full control of Crown Imports, a JV Constellation ran with Modelo, as well as ownership of the Mexican brewer's Piedras Negras brewery and the perpetual rights to Modelo's brands in the US. 

The Crown portfolio includes Corona Extra, Corona Light, Modelo Especial, Negra Modelo, Pacifico, Victoria from Mexico and Tsingtao from China. 

Constellation said it will now operate with two divisions: a beer division and a wine and spirits division. 

The group has been the benefactor of A-B InBev being forced to offer concessions on its capture of Modelo, after an anti-trust lawsuit filed by the US Department of Justice. The Budweiser brewer completed on its US$20.1bn acquisition of Modelo last Tuesday

Constellation plans to invest $500-$600m during the next three years to double the Piedras Negras brewery's capacity to meet "projected demand" in the US, it said. The company and A-B InBev have also agreed a three-year "transition services agreement" to ensure the "smooth" handover of the brewery.

Rob Sands, Constellation's CEO, said: “Today begins a new chapter in Constellation’s history.”

He added: "We are ... very excited about the potential for developing new products and line extensions within the portfolio of brands in the US."

Sands told investors last week the deal will make Constellation the US' third largest beer supplier

To read an exclusive comment piece on A-B InBev's global plans for Corona, click here.

Expert analysis

2012 The U.S. Beer Market

2012 The U.S. Beer Market

This "value set" report combines Beer in the U.S., Imported Beer and Specialty Beer and Microbrewery Markets to create the most exhaustive study of the U.S. beer market available. An $18,000+ value th...read more