Mexico City, Mexico - Grupo Modelo, the last major independent Mexican beer producer, has been acquired by Anheuser-Busch InBev NV for a reported $20.1 billion, continuing a trend of industry consolidation.
After the completion of the deal, Grupo Modelo, producer of Corona the top-selling import beer in the US, will be integrated into AB InBev, the world’s biggest beer company.
Two years ago FEMSA, the Mexican company that produces beers such as DosEquis, was acquired by Heineken. Now only niche market craft breweries in Mexico remain outside of the control of the global beer giants.
In a conference call with reporters Carlos Fernandez, Grupo Modelo’s CEO, said that "Grupo Modelo’s name, identity, heritage and headquarters in Mexico City will be maintained, and the company will continue to have a local board."
"In selling to AB InBev the other 50% of Modelo that they didn’t already own (since 1993,)" Fernandez said, "Modelo is firmly positioning itself as a 'world leader' amid further beer industry consolidation. The combination was the natural next step for the two companies."
Mexico, the world’s 12th largest economy, has a strong brewing tradition thanks to skills brought by German immigrants in the 19th century. It is currently the world’s fourth most-profitable beer market, and experts consider the country’s economy to be poised for continued growth.
The Economist, a economic publication owned by the Finacial Times, recently reported that "Mexico's well-run economy has continued to surge during the world economic crisis. Export manufacturing is competitive, and indeed, Mexico now looks like a better bet than Brazil for rapid economic growth. A growing middle class, rising urbanization rates, and increased consumer spending due to higher disposable incomes are expected to continue to drive the country's private consumption."
Once a relatively unknown brand, Corona, with the help of surfers who became fans of the beer during trips to Mexico, gained a steady following of fans in the US and around the globe. Corona is now the number one selling import beer in 38 countries around the world.
The combined company will lead the global beer industry with roughly 11 billion gallons of beer volume annually and 2012 estimated revenues of $47 billion. Its operations will span 30 countries and will employ more than 150,000 employees across the globe.
The AB Inbev deal will help Grupo Modelo’s beers reach even more consumers around the globe, and consumers in Mexico will benefit from the increased choices offered by AB InBev’s extensive portfolio.Sources: AB-InBev.com/Forbes