US: Constellation Brands to acquire full ownership of Crown Imports

By | 29 June 2012

Constellation Brands will take full ownership of Crown Imports

Constellation Brands will take full ownership of Crown Imports

Constellation Brands has agreed to buy the remaining half of Crown Imports for US$1.85bn, as a result of Anheuser-Busch's deal to buy Grupo Modelo

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%.

Expert analysis

Grupo Modelo SA de CV in Beer (World)

Grupo Modelo was the seventh largest global brewer in 2011. The company is the leading player in its domestic Mexican market, and its Corona Extra brand is exported to 180 countries. Modelo is well placed for future growth in Mexico, and should be able to benefit from the growing popularity of imported premium lager brands in its main US, Canadian and UK markets, but in order to maximise its growth, it should invest in strengthening its position in key markets and extending its coverage further.

Sectors: Beer & cider, Mergers & acquisitions

Companies: Constellation, Modelo, InBev

There are currently no comments on this article

Be the first to comment on this article

Related research

Constellation Brands Inc (World)

With the sale of its European and Australian segments and a fall from first place to third in global wine volume share, Constellation Brands needs a growth strategy and a plan to escape its almost total reliance on the US. In this report, Euromonitor...

Constellation Brands Inc (Wine)

With the sale of its European and Australian segments and a fall from first place to third in global wine volume share, Constellation Brands needs a growth strategy and a plan to escape its almost total reliance on the US. In this report, Euromonitor...

Grupo Modelo SA de CV in Beer (World)

Grupo Modelo was the seventh largest global brewer in 2011. The company is the leading player in its domestic Mexican market, and its Corona Extra brand is exported to 180 countries. Modelo is well placed for future growth in Mexico, and should be ab...

Related articles

Review of the Year 2012 - Part I: Beer & Cider

With Christmas fast approaching, it's the time of year when just-drinks takes its annual look back at the past 12 months. Between now and the end of the year we'll assess how the soft drinks, spirits, wine and bottled water sectors have fared in 2012. Up first, however, is beer and cider. just-drinks' deputy editor, James Wilmore, takes us through the highs and lows for the long alcoholic beverage (LAB) category.

just the Ten - Top Hot Topics of 2012

With the end of the year looming, just-drinks is running a series of 'Top Tens of the Year' in the run-up to Christmas. Here are the ten most read Hot Topics on just-drinks in 2012.

Review of the Year 2012 - Part IV: Wine

The penultimate part of just-drinks' review of 2012 looks at a tumultuous year for the wine category.

Read more on this hot issue

Round-Up - Anheuser-Busch InBev takes control of Grupo Modelo

This week has been dominated by Anheuser-Busch InBev's move to take control of Grupo Modelo. Here's just-drinks' coverage of the saga.

just-drinks tagline

Not a member? Join here

Decrease font sizeDecrease font sizeDecrease font size Increase font sizeIncrease font sizeIncrease font size Comment on this article Email this to a friend Print this page