Grupo Modelo, Mexico’s leading brewer, whose $20.1bn acquisition by Anheuser-Busch InBev has hit a stumbling block in the United States, reported modest quarterly results as earnings were hit by a higher tax bill and the relative strength of the Mexican dollar to the US dollar.
In a filing to the Mexican stock market that had very little of the fizz of its famous products, Modelo said that last year’s net profit of 3.47bn pesos ($272m) represented a 1.8 per cent decline compared with the same period in 2011.
Modelo, whose Corona Extra brand is the top selling export beer in the United States, reported a 2.1 per cent year-on-year increase in sales volumes within Mexico, while export volumes grew by 3.8 per cent.
But Modelo said: “Income from exports fell by 0.8 per cent due to the impact of the increase in the value of the peso compared with the dollar.”
Exports amounted to 28 per cent of the total volume of all sales during the quarter. Some 80 per cent of exports go to the United States.
As legal wrangling continues over AB InBev’s attempt to take over the half of Modelo that it does not already own, the company said that it would not have its usual conference call with analysts this quarter.
The US Justice Department recently sued to block the deal on grounds of the alleged incompatibility with US regulations on competition:
Now Bloomberg reports that the case has been assigned to Washington’s slowest judge.
US District Judge Richard Roberts, who was randomly picked to handle antitrust litigation over the $20.1 billion deal, carries the largest backlog of unfinished cases and unresolved motions among his Washington colleagues, according to federal court data.
And, Bloomberg adds: “Delays in the AB InBev case could derail the deal if the litigation pushes past the termination date called for in the sale agreement. The parties have until December 30 to complete the transaction, and may extend it another 90 days if it’s in court. After that, Modelo may be able to walk away with the $650 million breakup fee.”
Shares in Modelo were largely unchanged, closing down 0.01 per cent at 119.2 pesos on Monday.
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