AB InBev, Constellation Brands reach revised Grupo Modelo agreement
Anheuser-Busch InBev (AB InBev), Leuven, Belgium, and Constellation Brands Inc., Victor, N.Y., announced a revised agreement that establishes Chicago-based Crown Imports as the No. 3 producer and marketer of beer in the United States through a complete divestiture of Grupo Modelo’s U.S. business. The transaction establishes Crown as a fully owned entity of Constellation and provides Constellation with independent brewing operations, Modelo’s full profit stream from all U.S. sales, and rights in perpetuity to the Grupo Modelo brands distributed by Crown in the United States, according to AB InBev.
As part of AB InBev’s acquisition of the half of Grupo Modelo that it does not already own, AB InBev has agreed to sell Compañía Cervecera de Coahuila, Grupo Modelo’s brewery in Piedras Negras, Mexico, and grant perpetual brand licenses to Constellation for $2.9 billion, subject to a post-closing adjustment. This price is based on an assumed 2012 earnings before interest, taxes, depreciation and amortization (EBITDA) of $310 million earned from manufacturing and licensing the Modelo brands for sale by the Crown joint venture, with an implied multiple of approximately nine times. The sale of the brewery would ensure independence of supply for Crown and provide Constellation with complete control of the production of the Modelo brands for marketing and distribution in the United States.