Constellation Brands Inc. (STZ) has agreed to buy the remaining
50% stake of Crown Imports LLC, its joint venture with Mexican
brewer Grupo Modelo SAB de CV (GPMCY, GMODELO.MX), for $1.85
billion from Anheuser-Busch InBev (ABI.BT, BUD).
The move comes as Belgian beer company Anheuser-Busch InBev
(ABI.BT, BUD) confirmed it will acquire the remaining stakes in
Grupo Modelo in a deal worth $20.1 billion.
The transaction is expected to close in the first quarter of
2013. "We expect this transaction to dramatically enhance the
financial profile of our company," Chief Executive Officer Rob
Sands said.
Earlier this week, the company's shares surged amid talk of
Anheuser-Busch InBev NV (BUD, ABI.BT) buying Grupo Modelo.
Investors had speculated that Constellation, which imports and
markets Modelo's brands into the U.S., could benefit from a
potential $3.5 billion buyout of its Crown Imports joint
venture.
Crown's portfolio of brands includes Corona Extra, Corona Light,
Modelo Especial, Pacifico, Negra Modelo and Victoria.
Under the terms of the transaction, Constellation and Crown will
have complete, independent control of distribution, marketing and
pricing for all Modelo brands in the U.S., while AB InBev will
ensure continuity of supply, quality of products and the ability to
introduce innovations.
Also today, the company said it would suspend its share
repurchase program--it currently has about $700 million remaining
under its one billion share repurchase authorization.
Shares of Constellation closed at $21.76 on Thursday and were
inactive premarket. The stock is down 7.9% in the last three
months.
Write to Saabira Chaudhuri at saabira.chaudhuri@dowjones.com