AB InBev Gulps Corona Maker For $20.1 Billion (Update 1)
Updated to reflect analyst comments and additional data throughout
NEW YORK (TheStreet) -- Anheuser-Busch InBev (BUD) is buying its remaining stake in Grupo Modelo, the maker of Corona beer, for $20.1 billion, in a move that further pushes the beer giant into fast growing Central American markets.
The move confirms previous reports of a deal; however, the $20.1 billion price tag for Grupo Modelo is far higher than the $12.1 billion Anheuser-Busch InBev was initially reported to be paying - signaling a continued thirst for beer makers to cut deals in the fast consolidating suds sector.
In the deal, Anheuser-Busch InBev will take control of Grupo Modelo's beers, in a push to tap beer consumption in Central America and the export of its brands like Corona to international markets. Already, Corona is the most imported beer in the United States and Anheuser-Busch InBev's beer presence stretches from the U.S., Latin America, Europe and beyond.
In April, Anheuser-Busch InBev bought Cerveceria Nacional Dominicana, the maker of Presidente beer and the largest brewer in the Dominican Republic for $1.24 billion, boosting its beer brands in the region.
Friday's deal is both about bolstering Anheuser-Busch InBev's presence in Mexico and other fast-growing Central American countries, while it's also about exporting Mexican beer globally. After the acquisition, Anheuser-Busch InBev will own Corona, Pacifico, Brahma, Presidente, Quilmes, and Modelo branded beers in Latin America, putting it in stiff regional competition with Heineken, which owns Dos Equis, Tecate and Sol beers.
"There is tremendous opportunity from combining two leading brand portfolios and further expanding Grupo Modelo's brands worldwide," said Carlos Brito, chief executive of Anheuser-Busch InBev, in a statement.
The combined company's beer making prowess draws in roughly $47 billion in annual revenue and has 150,000 employees spread across operations in 24 countries. The deal values Grupo Modelo at 10.8 times its expected 2012 earnings before interet, taxes, depreciation and amortization after synergies of the deal are realized, according to JPMorgan calculations.
For more on fast-growing beer markets, see the world's 10 drunkest countries.