US: Constellation Brands to acquire full ownership of Crown Imports
Constellation Brands will take full ownership of Crown Imports
The import beer sales, marketing and distribution business is a 50-50 joint venture between Modelo and Constellation Brands, but the deal, announced today (29 June), will mean Constellation will take full ownership. The deal is expected to close during the first quarter of 2013, subject to regulatory approval.
The purchase price of US$1.85bn represents 50% of a multiple of around 8.5 times Crown’s EBIT.
“This is a significant milestone in the history of Constellation Brands,” said Rob Sands, Constellation's president & CEO. "Our full ownership of this significant beer business provides an additional strategic lever for driving overall profitable organic growth."
Under the terms of the deal, Constellation and Crown will have complete control of distribution, marketing and pricing for all Modelo brands in the US, while A-B InBev will "ensure continuity of supply".
Due to A-B InBev buying Modelo, it is likley the brewer would have faced competition issues over inheriting a stake in Crown, by taking its total distribution in the US to over 50%.
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