AB InBev secures $1bn Caribbean deal

AB InBev has announced a deal that will give it a 51% stake in Dominican brewer Cerveceria Nacional Dominicana (CND).

The deal was agreed with the majority shareholder Leon Jimenes for US$1 billion. AB InBev will also buy a 9.3% share that currently belongs to Heineken for a further US$237m.

The new Caribbean venture will be linked to AB InBev’s Brazilian subsidiary in a “strategic alliance” the brewing giant said in a statement.

Purchase of the brewer – which already has a licence to brew several AB InBev brands as well as the local Presidente – gives the company access to 16 markets across the region including Dominica and the Dominican Republic, Antigua and Saint Vincent and makes it the largest drinks company in the Caribbean.

The deal is expected to be completed by the end of June.

Elsewhere, the brewer’s volume sales in the US and Russia declined by 3.4% and 9.9% respectively.

In the US the fall was thought to have been triggered by the company raising the prices of its sub-premium brands; however US drinkers are showing signs of moving to Bud Light, Michelob Ultra and Stella Artois, which are all classed as premium beers.

In Russia, last year’s tax hike on beer of 200% hit sales, although the brewer has confirmed an extension of its sponsorship of the FIFA World Cup to include the 2018 tournament which is scheduled to be held in Russia.

Overall revenues were up 3.6% to US$10.2bn, helped by an increase in Brazilian sales of 1.7%.