US: Constellation Brands to acquire full ownership of Crown Imports
By James Wilmore | 29 June 2012
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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
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US: Constellation Brands to acquire full ownership of Crown Imports
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