Prior to the transaction, A-B InBev had an "existing economic stake of more than 50%" of Grupo Modelo.
A statement from A-B InBev said: "The combination will be completed through a series of steps that will simplify Grupo Modelo's corporate structure, followed by an all-cash tender offer by A-B InBev for all outstanding Grupo Modelo shares. The tender price represents a premium of approximately 30% to the closing price of Grupo Modelo series C shares on June 22, 2012."
The combined company is to boast 400 million hectolitres of beer volume annually and 2012 estimated revenues of USD 47 billion. Its combined operations are said to span 24 countries, with 150,000 employees across the world.
The Modelo name and headquarters are to remain in Mexico City and the company is to have a local board, while two Grupo Modelo board members will join the A-B InBev board. The new members are to invest US$1.5billion of their proceeds from the tender offer into shares of A-B InBev.
The transaction is subject to regulatory approvals in the US, Mexico and other countries, the approval of the shareholders of Grupo Modelo in a general meeting and other customary closing conditions. It is expected to close during the first quarter of 2013.
Carlos Brito, chief executive officer of Anheuser-Busch InBev said: “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 recognise 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.”
In a related transaction, Grupo Modelo will sell its existing 50% stake in Crown Imports, the joint venture that imports and markets Grupo Modelo’s brands in the US, to Constellation Brands for US$1.85 billion, giving Constellation Brands 100% ownership and control. As a result, Grupo Modelo’s brands will continue to be imported, marketed and distributed independently in the US through Crown Imports.
