No Bottle Spinning Here: AB InBev (BUD) Eyes $12B for All of Grupo Modelo
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Call it a marriage made in sudsy heaven.
Anheuser-Busch InBev SA (NYSE: BUD) is closing in on acquiring the remaining amount of Grupo Modelo it doesn't already own for a rumored purchase price of $12 billion.
According to reports out Monday morning, AB InBev could announce a deal later this week, though nothing had been finalized yet. The company already holds a 50 percent non-controlling interest in Modelo.
Shares of AB InBev are up over 2 percent in European trading.
With the sluggish European economy hampering sales, AB InBev is looking for ways to expand outside its key market. The acquisition of Anheuser-Busch Cos. in 2008 for $52 billion gave InBev immediate exposure with the stake in Modelo, but more lies in store. Modelo tried suing AB following the deal, claiming it wasn't consulted before anything closed.
One analyst thinks a $12 billion deal would be attractive to AB InBev, boosting EPS by about 10 percent. Modelo currently holds a market cap of about $23 billion, as of latest numbers.
Modelo trades at a price-to-earnings ratio of 28.7, versus 19 for AB InBev and the industry average of 26.3.
Market data for 2011 showed AB InBev with an 18.3 percent share of the world's beer market, while Modelo claims 2.9 percent. Brewing giant SABMiller claims a 9.8 percent share.
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Anheuser-Busch InBev SA (NYSE: BUD) is closing in on acquiring the remaining amount of Grupo Modelo it doesn't already own for a rumored purchase price of $12 billion.
According to reports out Monday morning, AB InBev could announce a deal later this week, though nothing had been finalized yet. The company already holds a 50 percent non-controlling interest in Modelo.
Shares of AB InBev are up over 2 percent in European trading.
With the sluggish European economy hampering sales, AB InBev is looking for ways to expand outside its key market. The acquisition of Anheuser-Busch Cos. in 2008 for $52 billion gave InBev immediate exposure with the stake in Modelo, but more lies in store. Modelo tried suing AB following the deal, claiming it wasn't consulted before anything closed.
One analyst thinks a $12 billion deal would be attractive to AB InBev, boosting EPS by about 10 percent. Modelo currently holds a market cap of about $23 billion, as of latest numbers.
Modelo trades at a price-to-earnings ratio of 28.7, versus 19 for AB InBev and the industry average of 26.3.
Market data for 2011 showed AB InBev with an 18.3 percent share of the world's beer market, while Modelo claims 2.9 percent. Brewing giant SABMiller claims a 9.8 percent share.
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