Anheuser-Busch InBev Completes Combination With Grupo Modelo

Brings together five of the top six most-valuable beer brands in world

Published in CSP Daily News

LEUVEN, Belgium -- Anheuser-Busch InBev and Grupo Modelo SAB de CV have announced that AB InBev has successfully completed its combination with Grupo Modelo in a transaction valued at $20.1 billion.

The combined company will benefit from the growth potential that Modelo brands such as Corona have globally outside of the United States, as well as locally in Mexico, where there will also be opportunities to introduce AB InBev brands through Modelo's distribution network.

The combined company will lead the global beer industry with approximately 400 million hectoliters of beer volume annually, bringing together five of the top six most-valuable beer brands in the world. Mexico is the world's fourth largest profit pool for beer and a very attractive market due to its projected growth, AB InBev said.

The companies expect the combination to generate approximately $1 billion in cost synergies.

Carlos Brito, CEO of AB InBev, said, "We have tremendous respect for Grupo Modelo and its brands, and we are thrilled to welcome our Grupo Modelo colleagues to the global team. We look forward to realizing our opportunities for growth and bringing our beers to more consumers around the world as we join two world-class brewers."

As previously announced, Ricardo Tadeu will serve as zone president Mexico and CEO of Grupo Modelo, effective immediately. Mexico will become AB InBev's seventh zone. Grupo Modelo's headquarters will remain in Mexico City, and it will continue to have a local board, which will be appointed by AB InBev at the next shareholders meeting. Carlos Fernandez, Maria Asuncion Aramburuzabala and Valentin Díez Morodo have been invited to continue to play an important role on Grupo Modelo's board.  They will also join AB InBev's board.

In connection with the completion of the combination, AB InBev announced the successful settlement of the all-cash tender offer for the remaining shares of Grupo Modelo that it did not already own for $9.15 per share. As of May 31, 2013, approximately 89% of Grupo Modelo's outstanding Series C common shares were validly tendered and acquired in the tender offer by a subsidiary of AB InBev. AB InBev now owns approximately 95% of Grupo Modelo's outstanding common shares.

Grupo Modelo will be fully consolidated in the AB InBev financial reporting as of June 4, 2013.

The related transaction with Constellation Brands, including the sale of Grupo Modelo's Piedras Negras brewery, Grupo Modelo's 50% stake in Crown Imports and perpetual rights to Grupo Modelo's brands in the United States, is expected to close on June 7, 2013.