Anheuser-Busch InBev is still beers "global mogul"

Anheuser-Busch InBev is still beer's "global mogul"

Anheuser-Busch InBev's takeover of Grupo Modelo has cemented its status as the world's biggest brewer and will drive future growth and sales, an analyst has said.

A-B InBev announced in June that it had agreed to buy the 50% of Mexico's Modelo it did not already own for US$20.1bn. The deal places the Belgian brewer ahead of rival “global mogul” beer makers, analysts CLSA said in a note yesterday (27 September).

“We expect A-B InBev's long-term sales and earnings-per-share growth to improve by one percentage point and from three to five percentage points, respectively, on the deal, likely to close in the first quarter of 2013,” the note said.

Mexico is well-placed to emulate A-B InBev's success in Brazil, where it has a 69% market share, the note said. Modelo has a 57% share in Mexico and margins can be lifted by lowering commodity costs and cutting staff.

The note also said A-B InBev can take advantage of future acquisitions in a global beer market 51%-controlled by brewers outside the top-five. A-B InBev has 20% of the global market while second-place SABMiller has 10%, the note said.

CLSA also said regulators were unlikely to block the Modelo takeover. However, last week, UK watchdogs said they were investigating whether the buy-out will raise competition issues in the country.