AB InBev Buys Modelo for $20B to Make Corona and Budweiser Flagship Brands

Anheuser-Busch InBev already owned half of Mexican Grupo Modelo but the world’s biggest brewer apparently needs to keep consuming all in its sight. InBev shelled out $20.1 billion to grab the other half of the brewer of such beers as Corona and Modelo and stake its claim to the growing Mexican market. The name of the website it set up to announce the deal says it all: GlobalBeerLeader.com.

It's a huge purchase, to be sure, but AB InBev sees the upside in the company as a whole and its Corona brand specifically. Modelo “is Mexico's biggest brewer with a 50 percent-plus market share in a virtual duopoly with Heineken's FEMSA Cerveza in the world's fourth most-profitable beer market,” Reuters reports. “Corona is the biggest imported beer in the lucrative U.S. market.” InBev shelled out so much dough partly because Modelo stakeholders had no real incentive to sell.

The wire service goes on to note that the Mexican beer market is growing at about 3 percent annually — not bad considering the world’s financial woes these days. Reuters hears that some analysts are saying AB InBev might set SABMiller as its next target while others say PepsiCo’s drink operations will be the next to be thrown into the beverage maker’s growing maw.

Either way, it sounds like InBev is putting itself in a good position to be swimming in cash for a long time – and throw a pretty good party to celebrate it.

Below, watch the joint video message from AB InBev CEO Carlos Brito and Grupo Modelo CEO Carlos Fernández after the announcement of their companies' merger: