Anheuser Busch Settles $20.1B Acquisition of Grupo Modelo

Anheuser-Busch InBev (BUD) has held a 50% stake in Grupo Modelo for some time (it was inherited from InBev’s $52 billion takeover of Anheuser-Busch in 2008), but the company decided to up its ante in the Mexican brewing company, buying the remaining shares it did not own from the Mexican families that control the company in a cash deal. AB InBev paid $9.15 per share cash, making the transaction valued at 278.6 billion MXN, or $20.1 billion.  At this level, the AB InBev-Grupo Modelo deal is the second largest beer deal in history and the largest takeover in the world for the second quarter. According to the press release announcing the same, “The tender price represents a premium of approximately 30% to the closing price of Grupo Modelo series C shares on June 22.”

Anheuser-Busch InBev NV (ADR) (NYSE:BUD)

“Grupo Modelo has been one of our most important partners for more than 20 years and we are very pleased to evolve our long and successful relationship into this combination,” said Carlos Brito, Chief Executive Officer of Anheuser-Busch InBev. “There is tremendous opportunity from combining two leading brand portfolios and further expanding Grupo Modelo’s brands worldwide through AB InBev’s extensive global distribution network. Our admiration for Grupo Modelo’s business and brands has only increased with time and we look forward to joining our historic and world-class breweries. We also recognize and appreciate the critical role that Grupo Modelo’s shareholders and management have played in the company’s longstanding success within Mexico and internationally and look forward to their continued contributions.”

“We have worked together with Anheuser-Busch InBev in a productive decades-long partnership, and it is time to cement our relationship through this merger,” said Carlos Fernandez, Chairman and Chief Executive Officer of Grupo Modelo. “Together we will be the leading global brewer with top brands around the world and positions in some of the fastest growing countries. This is an exciting transaction that will bring our brands and proud heritage to even more consumers internationally while offering an increasing number of AB InBev’s brands in Mexico. Grupo Modelo’s Board believes that this combination will deliver significant benefits for all stakeholders.”

The combined company of AB InBev and Grupo Modelo  would lead the global beer industry with roughly 400 million hectoliters of beer volume produced annually and 2012 estimated revenues of $47 billion. The company’s operations would span 24 countries around the world, accounting for the liveilhoods of over 150,000 workers globally. It will also be responsible for five of the world’s top six beers and seven of the world’s top ten.