![]() ![]() Modelo’s controlling families, including some of Mexico’s wealthiest and descendants of the company’s founder, were in no rush to sell. ![]() gallons) of beer a year, 75 percent more than world number two SABMiller, with estimated revenues of $47 billion and 17 billion-dollar brands, with the addition of Corona Extra, Modelo Especial and Victoria. The new expanded AB InBev would produce about 400 million hectolitres (10.6 billion U.S. Modelo GMODELOC.MX, founded in 1925, is Mexico's biggest brewer with a 50 percent-plus market share in a virtual duopoly with Heineken's HEIN.AS FEMSA Cerveza in the world's fourth most-profitable beer marketĪB InBev expects cost savings from the deal of at least $600 million annually after four years, more than most analysts anticipated, plus a further one-time $500 million of cashflow gains. The long-awaited deal is the biggest foreign buyout of a Mexican company in more than 20 years and shows how much global brewers are willing to pay for developing market growth in an increasingly consolidated industry.ĪB InBev ABI.BR, the owner of Budweiser and Stella Artois beers, said on Friday it had reached an agreement with Modelo's GMODELOC.MX controlling families to buy the half of Modelo it does not already own, increasing its exposure to Mexico's beer market which is growing at about 3 percent a year. This gives students an interesting opportunity to discuss what they value most in a company, along with which option they think is best for Grupo Modelo and why.The logo of Anheuser-Busch InBev is seen on the facade of its headquarters in Leuven June 25, 2012. Of the three, Grupo Modelo was in the worst situation and faced a tough choice as all of its options involved sacrificing a part of the company. In this case students get a chance to look at a complicated acquisition proposal that involves three companies. ![]() The InBev offer was dominating the headlines in business sections worldwide, and Fernandez knew he had no time to waste. He needed to have a recommendation and a minimum acceptable bid price for Modelo’s board soon. Whatever option he chose, he knew he would have to make a compelling case to his board to convince all of them that his recommendation would maximize value for Modelo. How would the Mexican public feel if its hallmark company was acquired by Americans? But the alternative may well be a de facto acquisition by InBev, which would own half of Modelo if the deal went through.įernandez looked over the options again and considered the pros and cons. Each option had its benefits, but in the end Fernandez knew the decision would be less about price and more about control.įernandez had a lot to consider: Grupo Modelo was an icon in its country-Mexico’s largest brewer and a source of national pride. Modelo had three options: it could try to buy back its stake from A-B, it could sell the rest of the company to A-B, or it could refuse to sell, thereby increasing the likelihood of the potential A-B/InBev merger. Ever since InBev made its move for A-B, Busch IV had been hinting at making Modelo an offer for its remaining shares, thus making the Mexican brewer a wholly-owned subsidiary and making Anheuser-Busch too large for InBev to acquire. A-B had recently received a takeover offer from industry giant InBev, and Busch feared that the shareholders would accept it, ending the storied brewer’s 150-year history as an independent company. ![]() On June 13, 2008, Carlos Fernandez, Chairman and CEO of Grupo Modelo S.A., had just finished a call with August Busch IV, the CEO of Anheuser-Busch (A-B), the iconic North American brewery that owned 50.2% of Modelo’s shares. Grupo Modelo: Trouble Brewing in the Global Beer Industryīy Uma Kakde, Kristin O’Planick, Kevin Shuller, and Jennifer Walvoord under the supervision of Professor Andrew Karolyi – 16 pages. ![]()
0 Comments
Leave a Reply. |