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Bud Woos Modelo

The Wall Street Journal is today reporting that Anheuser-Busch has entered into talks with Grupo Modelo about some sort of merger or acquisition in an effort to keep InBev’s takeover bid from becoming a reality. This is at least one of the strategies that had been floated in recent weeks and months for strengthening A-B. If you’re unfamiliar with Grupo Modelo, they are the largest brewer in Mexico, with nearly a two-thirds share of the Mexican market, and I’m sure you know at least one of their dozen brands: Corona. A-B already has a 50% stake in the Mexican beer company, but it’s non-voting stock and thus they have no control over the business. Today’s AP story regarding the InBev deal mentioned that InBev’s weak performance last quarter makes getting enough equity to complete the takeover possibly problematic, meaning that an A-B that also included control of Corona would be more expensive, which might be enough to kill the deal. Strap in folks, this is getting interesting.

 

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