Anheuser-Busch InBev,the worlds biggest brewer,will swallow the half of Grupo Modelo it does not already own for $20.1 billion in the latest in a string of deals by big brewers looking for growth in emerging markets. The owner of Budweiser and Stella Artois beers said on Friday that it had reached agreement with Modelos controlling families for it to secure a leading position in a growing domestic beer market and capture the best-selling Mexican beer Corona Extra. Modelo,founded in 1925,is Mexicos biggest brewer with a 50%-plus market share in a virtual duopoly with Heinekens FEMSA Cerveza in the worlds fourth-most-profitable beer market. Corona is the biggest imported beer in the lucrative US market. AB InBev is attracted to Modelo by a Mexican beer market that is growing at about 3% and cost savings that the company said would be at least $600 million a year. AB InBev said it had added $14 billion of new bank loans to fund the all-cash transaction,adding that it would reduce its net debt/core profit (Ebitda) ratio to 2.0 times during 2014. Some analysts believe AB InBev could then line up world number two SABMiller as its next acquisition target. AB InBev shares were 0.5% higher at 4:05 am EDT (0805 GMT),underperforming in sharply firmer European stock markets and against a 0.9% gain on the STOXX European food and beverage index. Two Modelo board members have committed to invest $1.5 billion of their proceeds in AB InBev shares,to be delivered within five years. The pair will also join AB InBevs board. AB InBev and Modelo confirmed they were in talks on June 25,following a series of deals by big brewers looking to expand in growing beer markets and find ways to cut costs. Nestle in talks to raise ¤7-billion acquisition loan Nestle has been talking to banks about raising a new 7-billion-euro syndicated loan to help fund its $11.85-billion takeover of Pfizer Nutrition. Nestle said in late April the acquisition would be fully debt-financed through internal cash resources,existing facilities and the bond markets. The new loan would give Nestle enough liquidity until the deal is approved,which is expected to be in the first quarter of 2013,if the acquisition goes ahead.
