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Constellation Brands to acquire Anheuser-Busch InBev’s Nava brewery operations

Published 03 October 2014

Constellation Brands has agreed to acquire glass plant and associated warehouse in Nava, Mexico from Belgian brewing major Anheuser-Busch InBev in a $300m deal.

Constellation

Constellation Brands has agreed to acquire glass plant and associated warehouse in Nava, Mexico from Belgian brewing major Anheuser-Busch InBev in a $300m deal.

The acquisition also includes Anheuser-Busch InBev's land and rail infrastructure.

Constellation plans to expand glass production capacity at the Nava brewery from one furnace to four furnaces over the next four years.

The company has also agreed to form a 50-50 joint venture with Owens-Illinois (O-I) to own and operate new glass plant.

O-I will supply glass to Constellation and will contribute around $100m in the joint venture, which does not include the warehouse, land and rail infrastructure.

It will also oversee plant operations including purchasing, technical services and the plant expansion.

The expansion is expected to see around $400m in investment, which will be equally shared by Constellation and O-I.

In addition to the company's glass sourcing activities, Constellation has started an additional five million hectoliter expansion at the Nava Brewery in Mexico.

Upon completion, the $550m expansion will extend production capacity to 25 million hectoliters when completed.

Constellation Brands chief financial officer Bob Ryder said: "Since completing the beer business acquisition in June 2013, our beer business has seen exceptional portfolio momentum, significantly outperforming the U.S. beer market as well as our original sales volume and depletion expectations.

"This excellent sales momentum, coupled with strong marketing and brand building, is expected to drive sales trends that will outpace the industry in the medium-term.

"Our additional investments in production capacity are designed to ensure that we are well-positioned to capture the continued momentum and growth opportunities we see in the marketplace for our portfolio well into the future."


Image: Constellation Brands headquarters in New York. Photo: Courtesy of DanielPenfield/Wikipedia.