--AB InBev to pay $9.15 per share in cash
--Move would give AB InBev full control of Corona Extra brand
--Antitrust regulators' approval remains question mark
(Rewrites throughout, adds analyst comment in seventh paragraph.)
BRUSSELS--Anheuser-Busch InBev NV (ABI.BT) said Friday it is acquiring the stake it doesn't yet own in Mexican brewer Grupo Modelo SAB (GMODELO.MX) in a deal worth $20.1 billion that would give the Belgian company full control of Corona Extra, one of the world's top beer brands, and cement its position in the growing South American market.
In a joint statement, the companies said the merger will be "completed through a series of steps that will simplify Grupo Modelo's corporate structure, followed by an all-cash tender offer by AB InBev for all outstanding Grupo Modelo shares."
They said the tender price for the shares -- AB InBev is offering $9.15 per share in cash -- represents a premium of around 30% to Grupo Modelo's closing price on June 22.
AB InBev already owns a non-controlling 50% stake in Grupo Modelo and the combined company would "lead the global beer industry" with estimated 2012 revenues of $47 billion from operations in 24 countries, the companies said.
The Modelo sale to AB InBev ends a contentious history between the companies. AB InBev won its 50% Modelo stake through InBev's $52 billion acquisition in 2008 of Budweiser producer Anheuser-Busch, a deal that created the world's largest beer maker by sales. Anheuser had tried unsuccessfully to entice Modelo to merge with the U.S. brewing giant after it received the unsolicited approach from InBev, people familiar with the matter said at the time.
Approval of the deal by antitrust regulators remains a question mark, as AB InBev has considerable market power in the U.S. and elsewhere. Modelo has some strong brands, especially Corona.
"The combination of both breweries creates a pan-American powerhouse with number one or two positions in every major market from Canada to Argentina," said Marc Leemans, an analyst at Bank Degroof in Brussels.
The move will increase competitive pressure in Mexico and create a stronger rival for Heineken NV (HEIA.AE) there, SNS Securities added. The broker said Grupo Modelo has a market share of around 56% in Mexico, while Heineken holds roughly 41% through its Femsa unit. Competition will likely heat up as soon as AB Inbev realizes synergies from its tie-up with Grupo Modelo, SNS said.
The two companies said they believed the cost savings from the merger would be worth at least $600 million annually.
"There is tremendous opportunity from combining two leading brand portfolios and further expanding Grupo Modelo's brands worldwide through AB InBev's extensive global distribution network," said Carlos Brito, Chief Executive of Anheuser-Busch InBev.
The companies said Grupo Modelo would keep its name and identity, would continue to be headquartered in Mexico City and would keep its local board.
--Amy Guthrie in Mexico City and Alessandro Torello in Brussels contributed to this article.
Write to Laurence Norman at Laurence.norman@dowjones.com
(END) Dow Jones Newswires
June 29, 2012 05:40 ET (09:40 GMT)
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