UK: Mexican deals boost Diageo's position on Cuervo - analyst
Much speculation still surrounds a possible bid for Jose Cuervo by Diageo
Analysts Nomura said that the Modelo deal, as well as Heineken's acquisition of FEMSA Cerveza two years ago, puts Diageo in a stronger bargaining position. "With both Mexican beer families having now sold out, we think this strengthens Diageo’s hand in negotiations on the Jose Cuervo brand," Nomura said in a note today (24 August).
The drinks group could also "replicate the cheap financing that A-B Inbev has for the Modelo deal, as most free cash flow is US-dollar based," it added.
Diageo reported a 21.7% leap in operating profits to GBP3.16bn (US$5bn) yesterday as emerging markets drove growth. These markets now account for 40% of the company's business.
Nomura added that Diageo has "significant headroom" for more M&A opportunities in emerging markets. It noted that Diageo expects to increase its exposure to emerging markets to 50% by 2015, and "successful M&A could boost this further".
Environmental sustainability remains one of the most active areas for the global drinks industry. This year, just-drinks returns to the subject with four separate management briefings, one per sector....
In the second part of this management briefing, which looks at environmental sustainability in the brewing sector, Ben Cooper looks at the role played by sourcing ingredients locally....
Here's the third part of this month's management briefing, which looks at three of the world's largest brewers and their efforts in the environmental sustainability arena....
It would appear that either Anheuser-Busch InBev doesn't have the stomach for a courtroom battle with the US Department of Justice - would anyone? - or it has had 'a bit of a chat' with the department...
- SABMiller's troubles fuel M&A rumours
- Diageo's future brighter than present suggests
- Diageo's Q1 Results by Region
- Focus - Remy Cointreau's H1 Performance by Brand
- Three Questions for the Drinks Industry
- Moët Hennessy unveils first Travel Retail outlet
- Diageo puts Beckham centre stage in Haig Club ad
- Moet Hennessy sales falter in YTD
- Diageo Q1 sales dip "in line with expectations"
- Diageo to appeal Parrot Bay UK TV ad ban