FDBusiness.com

Constellation Brands to Buy Mexican Brewery For 600 Million dolars

 Breaking News
  • Florette Further Expands its UK Business In line with its strategy to be a major player within the UK fresh produce category, Florette UK & Ireland (part of the French Agrial group) has acquired the Wigan site of MyFresh Prepared Produce, a producer of a wide range of salad and vegetable products. MyFresh, Wigan, which employs almost 300 people and was [...]...
  • FrieslandCampina Simplifies its Organisation Royal FrieslandCampina intends to simplify its organizational structure into four to be set up global business groups – Consumer Dairy, Specialised Nutrition, Ingredients and Basic Dairy. A less complex structure will enable FrieslandCampina to more decisively respond to the market developments and to innovate better with respect to strategic priorities. The objective of the new [...]...
  • Heineken’s Acquisition of Punch is Cleared The Competition and Markets Authority (CMA) has accepted proposals by Heineken to resolve concerns over its £402.7 million acquisition of Punch Taverns, one of the UK’s largest leased pub companies, with a portfolio of more than 3,500 pubs nationwide. In June, the CMA said that Heineken’s proposed purchase of part of the Punch Taverns estate [...]...
  • Changing Consumer Tastes Drive Long-term Global Sugar Market Slowdown The consumers’ shift away from sugar consumption is an important driver behind significant changes in the food and beverage industry. These changes will have long-term ramifications, including a likely slowdown in the worldwide sugar market, according to the latest report of Rabobank ‘Sweetness and Lite’. A combination of changing preferences, product reformulations and government pressure have [...]...
  • How is the Rise of E-Commerce Changing the Role of Physical Stores? The rise of the internet has allowed retailers to directly connect with consumers from beyond the physical store revolutionising the competitive space more than ever. The world recently saw the acquisition of Amazon and Whole Foods which sent shock waves through the retail industry. This unforeseen merger has put retailers under pressure more than ever [...]...
  • SPX FLOW Appoints Pierre Sbabo as Vice President, Food and Beverage in EMEA SPX FLOW has announced the appointment of Pierre Sbabo as the Vice President of its Food and Beverage business in EMEA. He comes from a strong background in the water and process technology markets with truly international experience. With a Master’s Degree in Marketing and International Business from ESC Chambery, Sbabo has worked for global leaders [...]...

Constellation Brands to Buy Mexican Brewery For 600 Million dolars

Constellation Brands to Buy Mexican Brewery For 600 Million dolars
November 01
12:26 2016

US-based drinks group Constellation Brands is to acquire a brewery operation from Grupo Modelo, a subsidiary of Anheuser-Busch InBev, for 600 million dolars. The brewery, located in Obregon, Mexico, is expected to have four million hectolitres of production capacity with minimal investment and optimization by Constellation after closing.

The acquisition of the Obregon brewery will allow Constellation to immediately obtain functioning brewery capacity to support its fast-growing, high-end Mexican beer portfolio and provides flexibility for future innovation initiatives. It also enables the company to become fully independent from the interim supply agreement with Grupo Modelo. As a result, Constellation will phase the build-out of 10 million hectolitres at Mexicali, with the first 5 million hectolitres of production capacity expected to become operational by December 2019, and subsequent capacity planned to align with future growth.

“We believe this is the right strategy to provide near-term capacity and greater flexibility to support our growth and innovation plans, while allowing for the build-out of our Mexicali brewery over an extended time period,” says Rob Sands, president and chief executive officer of Constellation Brands. “We look forward to welcoming Obregon’s talented employees to our Constellation family and working together to continue to capture the ongoing growth opportunities we see in the high-end segment of the US beer market.”

The Obregon brewery is located on Mexico’s west coast in the state of Sonora, and will help service Constellation’s largest beer markets in the western US. The majority of Obregon’s production is currently satisfying the interim supply agreement, so it is expected to be a smooth transition during the continued expansion of the Nava brewery and the build-out of the Mexicali brewery.

ConstellationBrandsLogo“The magnitude of our long-term investments in Mexico largely remain the same. The revisions to our operating plans essentially represent an initial shift in spend to Obregon from Mexicali. This will result in an increase in our free cash flow estimate for fiscal 2017 to a range of $575 – $675 million,” explains David Klein, executive vice president and chief financial officer, Constellation Brands. “As originally outlined, Mexicali is scalable to 20 million hectoliters to support the future growth of our beer business, which continues to significantly outperform the U.S. beer market.”

Constellation is the third biggest beer company in the US with high-end, iconic imported brands such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico. The company’s beer portfolio also includes Ballast Point, one of the most awarded craft brewers in the US. In addition, Constellation is the world’s leader in premium wine, selling brands including Robert Mondavi, Clos du Bois, Kim Crawford, Meiomi, Mark West, Franciscan Estate, Ruffino and Jackson-Triggs. The company’s premium spirits brands include SVEDKA Vodka and Casa Noble Tequila.

About Author

mike

mike

Related Articles



Food & Drink Business Conference & Exhibition 2016

Upcoming Events

  • September 11, 2017drinktec
  • September 13, 2017FI Asia
  • September 19, 2017PROCESS EXPO 2017
  • September 22, 2017Global Summit on Food & Beverages
AEC v1.0.4

The Magazine

F&D Business Preferred Suppliers

Advertisements