A-B InBev's Quest for Brewery Monopoly: Grupo Modelo Acquis - Research Paper

Paper Type:  Research paper
Pages:  3
Wordcount:  647 Words
Date:  2023-05-04


Anheuser-Busch InBev's strategic logic in acquiring the share of Grupo Modelo was that it would become the world's biggest brewer as well as one of the most tenacious consolidators in the brewery industry. The move was aimed at gaining monopoly in the brewery industry. Growth in the number of stable brands that the company boasted of was another strategic logic that the company used in the acquisition of Grupo Modelo. Anheuser-Busch InBev's looked into increasing its profit margins, its sales while reducing its expense margins.

Trust banner

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Through the merger, Anheuser-Busch InBev's would have and added advantage in that it will successfully add Corona to its number of stable brands and hence increase its profit margins. The availability of a variety in terms of production is one of the aspects that bring about the success of a company in appealing to a larger population of customers. Through this, it is able to not only increase its revenue but also increase the profits it accrues every other time. Before the acquisition, the company had Budweiser and Stella Artois as its stable brands, and after the merger, the number would rise to three stable brands in the market.

Another advantage that the merger would bring about was the increased revenue in the long run. Upon the approval of the acquisition move by the stakeholders, the revenue of the combined company would rise to $47 billion (Merced & Scott, 2012). Every business establishment aims to increase its revenue margins while reducing its expense margins, and this was one of the things that Anheuser-Busch InBev would achieve after the successful acquisition of Grupo Modelo.

Having an increased number of branches across the globe was another advantage that the company would achieve as a result of it combining with Grupo Modelo. Through the merger, the company would have its branches in 24 countries across the globe. The move would increase the number of employees of the company to 150000, which is inclusive of the distributors.

The main disadvantage that Anheuser-Busch InBev would experience in the process of acquisition was the huge expenses that involved both cash and bank loans. After the acquisition, the company would be left with an amount of $14 billion worth of bank loans that it would need to pay afterward.

The key advantage that the acquisition would present to the distributors and the consumers of the two companies was the provision of a variety of products to sell and indulge in respectively.

The US antitrust authorities that came up to challenge this deal were not only unfair but also those that hamper the success of companies. Every independent company has the right to either sell or buy shares to and from other companies without any limitation and influence form an external body.

After much deliberation, the department of justice of the United States finally allowed the merger to take place (Wyatt, 2013). This was not only favorable for the two companies but also for the entire nation in that a renowned brand in the nation could now be known across the globe just as a result of its combination with the brands of another global company.

One acquisition merger that was inhibited by the US antitrust authorities was that of AT&T and T-mobile (Roy, 2017). In 2011, the AT&T expressed its desire to purchase T-mobile of which the Department of Justice sought to block and successfully achieved. The move by the government denied the two companies and the entire society as a choice.


Merced, M. J. D. L., & Scott, M. (2012). Anheuser-Busch InBev Buys Rest of Grupo Modelo, Maker of Corona Beer. https://dealbook.nytimes.com/2012/06/29/the-beer-wars-heat-up-with-modelo-deal/

Roy, J. (2017). 4 Corporate Mergers Shot Down By the Government. https://splinternews.com/4-corporate-mergers-shot-down-by-the-government-1793840916

Wyatt, E. (2013). Antitrust Agreement in Merger of Brewers. https://dealbook.nytimes.com/2013/04/19/anheuser-busch-reaches-deal-with-antitrust-regulators/?mtrref=dealbook.nytimes.com&assetType=REGIWALL&gwh=A19D3E068807C8C6650528B22702DFAB&gwt=pay

Cite this page

A-B InBev's Quest for Brewery Monopoly: Grupo Modelo Acquis - Research Paper. (2023, May 04). Retrieved from https://proessays.net/essays/a-b-inbevs-quest-for-brewery-monopoly-grupo-modelo-acquis-research-paper

Free essays can be submitted by anyone,

so we do not vouch for their quality

Want a quality guarantee?
Order from one of our vetted writers instead

If you are the original author of this essay and no longer wish to have it published on the ProEssays website, please click below to request its removal:

didn't find image

Liked this essay sample but need an original one?

Hire a professional with VAST experience and 25% off!

24/7 online support

NO plagiarism