Molson heads for South America

Canadian brewer buys Bavaria from AmBev

Nov 6, 2000 - Canada's Molson Inc. is entering the South American beer market by buying Bavaria from brewing giant AmBev.


Molson will pay $213 for the Bavaria brand and five breweries, paying $98 million up front and the rest over five years, subject to the brand's performance.

Brazilian antitrust officials ordered the sale of Bavaria as a condition for the formation of AmBev in March by Companhia Cervejaria Brahma and rival Companhia Antarctica Paulista. Bavaria has a 3.3% share of Brazil's huge market, the largest in Latin America. AmBev, the world's fourth-largest brewery, has 70% share of the Brazilian market.

The Brazilian market is four and a half times the size of the Canadian beer market. Currently ranked fourth, Brazil is expected to surpass Germany and become the world's third-largest beer market with an annual growth rate of 4.5%. The Brazilian beer market is also highly concentrated with four major competitors, a growing youth-adult market and an estimated 26% increase in per capita beer consumption by 2003.

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