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December 3, 2003

ECUADOR: AmBev acquires SurAmericana

AmBev has bought into one of the Latin American markets it has yet to hold an interest in.

AmBev has bought into one of the Latin American markets it has yet to hold an interest in. The company, full name Companhia de Bebidas das Americas, has purchased an 80% stake in Ecuador’s number two brewery Cerveceria SurAmericana.

The world’s fifth-largest brewer has paid $36 million to buy 80% of the company. With a foothold in Uruguay, Paraguay, Peru, Venezuela and Guatemala, the move is seen as the closing of the loop.

The move marks a clear statement of intent as a strategic challenge to Columbian brewer Bavaria. Bavaria brews about 90% of the beer in Ecuador through its Cerveceria Andina and Compania de Cervezas Nacionales units. It also operates in Colombia, Peru, Panama, Bolivia and Chile. SurAmericana is a long way behind Bavaria with only a 6% share of domestic beer sales.

AmBev’s previous strategy to open new markets successfully has been to grab a small slice of a country’s beer sales and then use its size to cut prices and pressure the competition. Speculation suggests that the company will use the same tactics in Ecuador.

AmBev estimates that, with a production capacity of 900,000 hectolitres per year, SurAmericana has the capacity to supply up to 30% of the market in Ecuador.

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