BajaNomad

the price of your favorite Mexican beer just went up!

woody with a view - 6-29-2012 at 03:02 AM

By Philip Blenkinsop

BRUSSELS (Reuters) - Anheuser-Busch InBev, the world's biggest brewer, will swallow the half of Grupo Modelo it does not already own for $20.1 billion in the latest in a string of deals by big brewers looking for growth in emerging markets.

The owner of Budweiser and Stella Artois beers said on Friday that it had reached agreement with Modelo's controlling families for it to secure a leading position in a growing domestic beer market and capture the best-selling Mexican beer Corona Extra.

Modelo, founded in 1925, is Mexico's biggest brewer with a 50 percent-plus market share in a virtual duopoly with Heineken's FEMSA Cerveza in the world's fourth-most-profitable beer market. Corona is the biggest imported beer in the lucrative United States market.

AB InBev is attracted to Modelo by a Mexican beer market that is growing at about 3 percent and cost savings that the company said would be at least $600 million a year.

AB InBev said it had added $14 billion of new bank loans to fund the all-cash transaction, adding that it would reduce its net debt/core profit (EBITDA) ratio to 2.0 times during 2014.

Some analysts believe AB InBev could then line up world number two SABMiller as its next acquisition target. Others say that the drinks operations of PepsiCo would make more sense.

AB InBev shares were 0.5 percent higher at 4:05 a.m. EDT (0805 GMT), underperforming in sharply firmer European stock markets and against a 0.9 percent gain on the STOXX European food and beverage index.

"I think the ($20 billion) price is the thing that is putting people off, but I think AB InBev will squeeze out much more in synergy savings than their guidance, so it makes sense," said a London-based beverage analyst who declined to be named.

Two Modelo board members have committed to invest $1.5 billion of their proceeds in AB InBev shares, to be delivered within five years. The pair will also join AB InBev's board.

AB InBev and Modelo confirmed they were in talks on June 25, following a series of deals by big brewers looking to expand in growing beer markets and find ways to cut costs [nL6E8HP9G6].

In April AB InBev agreed to buy the Dominican Republic's Cerveceria Nacional Dominicana for more than $1.2 billion, while in the same month Molson Coors bought East European brewer StarBev for 2.65 billion euros ($3.3 billion). Last year SABMiller purchased Foster's for $11.8 billion.

AB InBev inherited a 50.4 percent stake in Modelo when InBev bought Anheuser-Busch for $52 billion in 2008. The enlarged group had hoped to mop up the rest of the Mexican brewer, but the controlling Fernandez family launched arbitration proceedings, claiming that the deal broke an agreement that Modelo should be consulted over any change in control of the stake.

The arbitration panel ruled in favor of AB InBev in 2010, but since then AB InBev executives have joined the Modelo board and pressure emerged from some family member and other investors to look for a sale.

The new expanded AB InBev would produce about 400 million hectoliters of beer a year, with estimated revenues of $47 billion.

In a related but separate transaction, Modelo would sell its 50 percent stake in joint venture Crown Imports to partner Constellation Brands Inc for $1.85 billion. Crown Imports distributes Modelo beers in the U.S. in a deal that runs to the end of 2016.

If AB InBev had wanted to buy out Constellation and distribute the beer itself, it would have pushed its market share in the United States above 50 percent, leading to anti-trust concerns.

(Additional reporting by David Jones; Editing by David Goodman)

http://finance.yahoo.com/news/ab-inbev-buys-corona-maker-063...

bajario - 6-29-2012 at 05:45 AM

Especial is my preferred pop. I'd hate to pay a peso more.
But I will.

Howard - 6-29-2012 at 05:52 AM

Woody, nice news to wake up to! You could of at least waited till mid day or until Monday morning to spring this news on us.

Anything else you want to share with us to brighten our day? :biggrin:

SFandH - 6-29-2012 at 06:41 AM

Beer? A worthy topic of interest to most.
Quote:
Originally posted by woody with a view
By Philip Blenkinsop

BRUSSELS (Reuters) - Anheuser-Busch InBev, the world's biggest brewer.......

Some analysts believe AB InBev could then line up world number two SABMiller as its next acquisition target.

http://finance.yahoo.com/news/ab-inbev-buys-corona-maker-063...


Bud buying Miller??? Where are the anti-monopolists? Beer is not a mere commodity, it's not potash, not oil, not pork bellies, competition must be maintained to ensure the quality of this staple of life.

It's time for the Supreme Court to do something important!

But then again, Bud, Miller, Corona, they are all very similar, pedestrian brews.

I noticed the last time I bought a 12 pack of water, er, I mean Tecate Light, no flavor is better than bad, at OXXO, that the price has recently increased 4 pesos.

Does anybody on this message board, besides wine drinkers who run out and are trembling, actually drink Corona?


[Edited on 6-29-2012 by SFandH]

Do I drink Corona?

thebajarunner - 6-29-2012 at 07:49 AM

Not unless it is the last bottle in the cooler,
neither do I drink Bud, Miller, Coors, etc.
and since AB gathered up Stella it is not longer on my list,
and likely this acquisition will start the demise of Negras, etc.

I have nothing against the brands, just the poor quality of yellow water that they put in their containers.

How the majors brewers have talked our California Hispanics into embracing BudLite, etc. has to be one of the all time marketing coups in history....

Taco de Baja - 6-29-2012 at 08:00 AM

Quote:
Originally posted by SFandH

Does anybody on this message board, besides wine drinkers who run out and are trembling, actually drink Corona?



Heck no! not even if it was $2/6 pack. Lots better, quality, craft beer at the $1/bottle price they charge for Corona, and no skunky swill flavor!

One of my favorite Mexican beers is Negra Modelo. I'm just bummed it only comes in glass bottles. On remote trips we try to limit the amount of glass we bring, so we have to go with the next best thing for canned Mexican beer: Modelo Especial, or Tecate.

David K - 6-29-2012 at 08:22 AM

Corona? Might be the worst tasting beer in Mexico... then again, I can't stand Budweiser either....

PACIFICO
DOS EQUIS LAGER ESPECIAL
and most other Mexican beers I do enjoy!

The last time I drank a Corona was when someone handing me one, as a gift...

Bob H - 6-29-2012 at 08:34 AM

Maybe the time has come to just make your own beer!

http://www.professorshouse.com/food-beverage/beer/articles/h...

TMW - 6-29-2012 at 08:37 AM

Take your choice 4th of July special at Smart and Final.

Ateo - 6-29-2012 at 08:47 AM

When I was in Guadajara recently, I noticed my wife's family pretty much only drank Corona. I was shocked!

I'm a Pacifico, Negra Modelo, Tecate guy. Or if I'm really feeling it I'll go with some local SD brewery pale ale.

bkbend - 6-29-2012 at 03:19 PM

I've always tried hard to dislike anything in the AB brand list, so I guess I'll be looking for a replacement for Pacifico now. Not that I've tasted a lot of AB stuff, I just assume any beer that needs to rely on massive advertising for market share doesn't have the product to stand on its own.

capt. mike - 6-29-2012 at 03:27 PM

24 oz tecate cans $1.79 ea Safeway today.....till wed.

Negra on draft

thebajarunner - 6-29-2012 at 03:46 PM

Found my Negra on draft several times lately,
Great stuff, on draft even better.

And, beer in cans>>>NOT!!

Good to great beer only comes in glass or on tap,

But, I surely agree that the convenience of the cans makes them appealing, just not much help for the taste, sad to say.

Bajaboy - 6-29-2012 at 04:48 PM

for the most part I drink local beers out of San Diego....sitting on a few cases here...(Stone, Ballast Point, Green Flash, Pizza Port) in Bahia Asuncion. When at home, I fill up my growler from Stone as often as possible. Nothing beats fresh brewed beer....

redhilltown - 6-29-2012 at 11:30 PM

Quote:
Originally posted by thebajarunner
Found my Negra on draft several times lately,
Great stuff, on draft even better.

And, beer in cans>>>NOT!!

Good to great beer only comes in glass or on tap,

But, I surely agree that the convenience of the cans makes them appealing, just not much help for the taste, sad to say.


Granted...beer in a bottle is better but cans do have their place. Off road...washboard...ice in cooler melts a bit...bottles start to bang around...caps open...disaster!!!!!!!

willardguy - 6-30-2012 at 12:03 AM

Quote:
Originally posted by the bajarunner
Found my Negra on draft several times lately,
Great stuff, on draft even better.

And, beer in cans>>>NOT!!

Good to great beer only comes in glass or on tap,

But, I surely agree that the convenience of the cans makes them appealing, just not much help for the taste, sad to say.

well there's a pile of uninformed crap! the aluminum can is superior in blocking flavor destroying UV light, you love it in kegs, why, just a big can! but it comes to you in a nice frosty glass mug. hey I totally
get the nostalgic feel of the glass bottle we all grew up with and who doesn't love the look of the long neck? craft breweries are embracing not only the environmental and economic benefits of cans but also enjoy the flavor saving aspects.
but then again, its just a beer!;D

capt. mike - 6-30-2012 at 09:17 AM

keg metal.....can metal.....mash pot metal.....what's the diff except size?

Russ - 6-30-2012 at 11:23 AM

What ever happened to Bohimia? None in this neck of the dessert.

surfdoc - 6-30-2012 at 02:35 PM

Now this is a post worth reading completely...

Second the Negra on draft... as soon as I get a second refridge have a deal with the Pacifico guys to supplty a quarter keg for poco pesos !!!

I'll drink water over bud....and corona as said if free.

BA is a Tecate town.... so no real threat here!

Zach you have beer with flavor hiding at your casa ???

Damn ..........

Bajaboy - 6-30-2012 at 07:01 PM

Quote:
Originally posted by surfdoc
Now this is a post worth reading completely...

Second the Negra on draft... as soon as I get a second refridge have a deal with the Pacifico guys to supplty a quarter keg for poco pesos !!!

I'll drink water over bud....and corona as said if free.

BA is a Tecate town.... so no real threat here!

Zach you have beer with flavor hiding at your casa ???

Damn ..........


Stan, I almost played a mean trick and left an empty bomber of Pizza Port Wipeout IPA on your door step but remembered the karma gods....yes, sitting on plenty of bombers...come over and let's enjoy a few together

Bob H - 6-30-2012 at 08:36 PM

Wow, post a thread about beer and you will get lots of attention. Unreal...

The Sculpin - 6-30-2012 at 08:55 PM

There's nothing better than 3 parts tangueray, 1 part grey goose and 1/2 part lillet blank, with a lemon twist (shaken, of course), after taking off at outside 3 rd and making it all the way to the rock! Beer!?! Naw..........

willardguy - 6-30-2012 at 09:19 PM

the sculpintini?:spingrin: