Grupo Modelo from México agreed to sell its remaining 50% to Belgian beer company Anheuser-Bush for 20.100 millions of dollars making AB the sole owner of Modelo, informed the Mexican company today.

In a press release sent to the Mexican Stock Market (BMV in Spanish) it specifies that with this operation the Corona beer "will join Budweiser as a worldwide flagship brand" of the Belgian group and that "annual synergies of at least 600 millions of dollars" are expected.

"The alliance will come to be after completing a series of steps to simplify the corporative structure of the Modelo group followed by a Public Offer of Acquisition (OPA) by Anheuser-Busch for all the Grupo Modelo stock in circulation" adds the document.

The corporate association "will be a leader of the global beer industry with a yearly production of about 400 million of hectoliters (approximately 10,567 millions of gallons) and annual sales of over 47,000 millions of dollars for 2012" continues Modelo.

"The transaction is subject to regulations in the United States, Mexico and other countries" as well as "the Grupo Modelo's Assembly of Stockholders and other customary closing conditions" explained the release.

It also informs that the Administration Councils from both companies "approved of the contract" and "will actively work with the supervisory body to efficiently manage the process of revision" so it comes to a satisfactory conclusion.

Anheuser-Busch InBev, that already owned 50% of the Modelo group and had an affiliation with the Mexican beer giant since 1993 will pay $9.15 USD for each of Modelo's stock; an operation to be paid in cash.

The price is equivalent to "a 30% prize over the closing price of $97.95 (Mexican) pesos" (around $7.14 USD) of the Modelo stocks based on last June 22, they add.

Together, both beverage companies will increase their operations "to 24 countries" and will "offer better opportunities for 150,000 employees all over the world".

"Grupo Modelo has been one of our most important partners for over 20 years and we are thrilled to take the next step in our long and successful alliance" stated Anheuser-Busch's CEO, Carlos Brito.

On the other side of the deal, Grupo Modelo's CEO and President of itsAdministration Council, Carlos Fernández said that the operation excites them because it will allow them to take the brands from both companies "to an even bigger number of consumers on a international level".

"Together, we will compose the leading beer group globally with the major brands in the world and will have a great position in some of most developed countries" he stated.

Established in 1925 by Spanish businessmen settled in Mexico, Grupo Modelo is the leader in beer production and exportation and has a total of 70 plants in the country with a capacity of over 70 millions of hectoliters (1,849 millions of gallons) per year.

Last year Mexico's main producer and exporter of beer registered a consolidated net profit of 18,441 millions of pesos (approximately 1,317 millions of dollars) in 2011, an 18% more than the previous period.

The Modelo group manages 13 brands of beer; amongst them is Corona Extra, the one with the biggest diffusion all over the world exported to 180 countries. Modelo is also the exclusive importer of the Budweiser beers and the Anheuser-Busch InBev's brands like Budweiser and Budweiser Light.

editorial@sandiegored.com

Translation by Karen Balderas Licea