uploads/2015/03/Beer-key-deals1.png

Business Combinations that Changed the Beer Industry

By

Updated

Consolidation

The beer industry has witnessed some key mergers and acquisitions that have resulted in notable consolidations. As we saw in the previous article, the beer industry is dominated by Anheuser-Busch InBev (BUD) (ABI.BR) and MillerCoors.

Article continues below advertisement

 Industry-changing deals

In 2007, leading companies SABMiller (SBMRY) (SAB.L) and Molson Coors Brewing (TAP) merged their operations in the United States and Puerto Rico. They formed a joint venture, MillerCoors, the second largest beer producer in the United States. The transaction did not include the international business of SABMiller and the Canadian operations of Molson Coors.

Previously, Molson Coors was formed by the 2005 merger of Canada’s Molson and Colorado-based Coors.

One of the major transaction was the 2008 acquisition of American brewer Anheuser Busch Companies, Inc. by Belgium-based Inbev for $52 billion. The transaction created Anheuser-Busch InBev, a market leader in the beer industry. Another major brewer, Heineken (HEINY) (HEIA.AS), acquired the beer business of FEMSA in 2010.

In 2013, market leader Anheuser-Busch InBev acquired Grupo Modelo, the Mexican brewer and maker of leading imported beer Corona, for $20 billion. In compliance with antitrust laws, Anheuser-Busch InBev sold to Constellation Brands, Inc. (STZ) its 50% stake in Crown Imports, Modelo’s Piedras Negras brewery, and rights to Modelo brands in the United States.

The SPDR S&P 500 ETF (SPY) and the iShares Russell 1000 Growth ETF (IWF) have allocated about 0.11% and 0.16% in Constellation Brands.

Recent deals

In 2014, Anheuser-Busch InBev reacquired Oriental Brewery, the largest brewer in South Korea. Anheuser-Busch InBev has also acquired many craft brewers over the years to capture the fast-growing beer segment. Recently acquired craft brewers include Goose Island, Blue Point Brewing Co., 10 Barrel, and Elysian Brewing Co.

In 2014, speculations about Anheuser-Busch InBev’s intentions to buy SABMiller resurfaced. Anheuser-Busch InBev already owns many leading beer brands in the industry.

Advertisement

More From Market Realist