The cold one war… Anheiser-Busch v. Modelo

It’s complicated:  Anheiser-Busch (maker of watered-down urine colored beverages) is half-owner of Grupo Modelo, which brews Corona, Modelo, Pacifico and Victoria beers, among others.  According to Modelo, a 1993 partnership agreement with Anheiser-Busch requires Modelo’s approval of any stock transfers.

Anheiser-Busch has been negotiating a friendly takeover by the Anglo-Brazilian brewer InBev (Becks, Bass, Bohemia, Brahma… and on and on) for $52 million dollars.  Even with the economic meltdown, apparently breweries still have money (at least they create a real product, and not loans on the theoretical value of the future of loans based on… whatever).  Modelo has not been a partner to the agreement and is demanding to pull out of the deal, or at least be granted the right to buy back it’s shares from Anheiser-Busch.

InBev is seeking to control the world beer market, so wants the deal to go through (plus, being a company with Euros, a dollar deal is particuarly attractive right now) and the whole thing will end up in arbitration, according to the Wall Street Journal’s Heidi N. Moore:

“What InBev and Anheuser-Bush have done is give [Modelo’s claims] the back of their hand since the beginning,” complained a person familiar with Modelo’s thinking. “It’s mealy-mouthed,” a person close to InBev and A-B said of the arbitration threat.

InBev and A-B say it would be unwise for Modelo to scuttle the deal, considering that A-B shareholders want that $70 a share deal price and probably would sue for it. That could result in a hefty legal tab for Modelo. For their part, A-B shareholders don’t seem concerned; the stock inched up 0.3% today to $59.95.

Modelo’s Mexican stock is controlled by Tresalia Capital — the business set up by María Asunción Aramburuzabala when she diversified her fortune (she was the heiress to the beer empire) into media, telecommunications and private education. There is a political connection with the United States. Mr. María Asunción Aramburuzabala is Texas political hack and Bush crony turned United States Ambassador Antonio Garza, Jr. If the Anheiser-Busch sale goes through, it would be one of the few recent stock deals that earn money for the investors (never mind that it moves another U.S. company into foreign control). If Modelo pulls out, it would be able to make it’s own deals with InBev, probably giving the Mexican company a larger stake in the international beverage giant… and giving Mexican beers a higher profile internationally than they would enjoy as a partly U.S. owned brand.

There must be some ticklish conversations around the Aramburuzabala-Garza household these days.

But, the real question is… will the beer be any good?