US: Anheuser-Busch InBev, Modelo deal to get DoJ go-ahead - analyst
A-B InBev has made a bid to appease anti-trust concerns over its move for Modelo
In a note yesterday (14 February), Stifel analyst Mark Swartzberg said: "We expect the Department of Justice (DoJ) to approve the transaction as it is aggressive, was motivated by the DoJ's objections, and, in our opinion, satisfies them by making Crown a truly independent competitor of A-B InBev in the US." It came after A-B InBev announced this week that it will sell the perpetual rights to Modelo's products in the US and the Mexican group's Piedras Negras brewery to Constellation Brands for US$2.9bn.
The concessions came after the DoJ filed an anti-trust lawsuit over the $20.1bn deal.
However, Swartzberg noted that brewing is a "new line of business" for Constellation and Crown Imports management and carries "execution risk". But he added: "Nine times EBITDA is the low end of brewer multiples, suggesting this business still has a positive present value, or is potentially additive to $45 per share, all else being equal."
For just-drinks' take on the latest developments, click here.
- Craft spirits shake-out will be just the beginning
- How Treasury is rewriting the rule book - Comment
- The decline of the flagship beer brand - Comment
- Drinkable yogurt - The next drinks opportunity
- Coca-Cola India suspends bottling operations
- Diageo brands need "fixing and nurturing" - TWE
- Diageo revamps Gordon's gin bottle in UK
- SAB shareholders granted AB InBev vote split
- Craft Brew Alliance poised for AB InBev takeover?
- Diageo's Guinness Rye Pale Ale - NPD
- The Next Seven Big Beverage Markets
- Global rum insights - market forecasts, product innovation and consumer trends
- Carlsberg AS (CARL B) - Financial and Strategic SWOT Analysis Review
- Global RTD insights - market forecasts, product innovation and consumer trends
- Adultifying Soft Drinks; Capitalizing on rising adult demand for non-alcoholic beverages