Rochester Business Journal

Constellation Brands. Inc. announced Friday morning it has agreed to buy the remaining 50 percent stake in the Crown Imports LLC joint venture from Anheuser-Busch InBev SA/NV. The move would give the Victor firm total control of distribution of popular Corona beers in the United States.

Constellation Brands currently owns 50 percent of Crown Imports, which is a 50-50 joint venture with Grupo Modelo S.A.B. de C.V. Constellation signed a definitive agreement with AB InBev to purchase the remaining 50 percent interest as AB InBev completes its proposed acquisition of Mexico-based Modelo in a reported $20.1 billion deal.

Constellation Brands has agreed to pay $1.85 billion, which represents 50 percent of a multiple of approximately 8.5 times Crown`s earnings before interest and taxes, the company said. The deal, which is subject to regulatory approval, is expected to close during the first quarter 2013. 

"This is a significant milestone in the history of Constellation Brands," said Robert Sands, president and CEO, in a statement. "We have been the importer, marketer and seller of the Modelo brands in the U.S. for almost two decades. During this time, the Crown team has successfully built the Modelo portfolio into an enviable position of leadership and growth.

“Our full ownership of this significant beer business provides an additional strategic lever for driving overall profitable organic growth.”

The deal will solidify Constellation Brands’ position as the largest multicategory supplier of beverage alcohol and the third-largest total beverage alcohol company in the United States, Sands added.

Crown`s portfolio of brands includes Corona Extra, Corona Light, Modelo Especial, Pacifico, Negra Modelo and Victoria. Corona Extra is the best-selling imported beer and the sixth best-selling beer overall in the industry. Corona Light is the leading imported light beer and Modelo Especial is the third-largest and one of the fastest growing major imported beer brands. 

The terms of the transaction give Constellation Brands and Crown complete, independent control of distribution, marketing and pricing for all Modelo brands in the United States. AB InBev will ensure continuity of supply, quality of products and the ability to introduce innovations, Constellation Brands said.

During Constellation`s fiscal 2012, Crown sold 164 million cases and generated $2.47 billion of net sales and $431 million of operating income.

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