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Home | News | Breweries | Constellation buys Mex brewery

Constellation buys Mex brewery

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Constellation changes: buy has Mexicali capacity cut

Obregon acquired from Modelo for US $600m

Constellation Brands has added a third brewery to its production network. It announced at the end of October that it had agreed the US $600 million purchase of Grupo Modelo’s Obregon brewery, a deal which has a knock-on effect for its Mexicali greenfield project.

Located on Mexico’s west coast in the state of Sonora, Obregon has a capacity of four million hectolitres. The majority of its production is currently satisfying the interim supply agreement between Modelo parent company Anheuser-Busch InBev and Constellation Brands. As such a smooth transition is anticipated, a welcome development during the continued expansion of the Nava (Piedras Negras) brewery, which is now planned to have a capacity of 27.5mhl, and the buildout of the Mexicali brewery.

With the acquisition the greenfield Mexicali project is to be scaled back from its original 10mhl target to 5mhl, with the potential for it to be scaled up to 20mhl at as yet unspecified future dates. The initial 5mhl brewery is expected to begin operations in December 2019.

Constellation Brands president and CEO Rob Sands commented, "We believe this is the right strategy to provide near-term capacity and greater flexibility to support our growth and innovation plans, while allowing for the buildout of our Mexicali brewery over an extended time period."

The transaction is subject to US and Mexican regulatory approvals.

 

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