Merger Creates World's Largest Beer Company, Passing Anheuser-Busch

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CHICAGO ( -- In a blockbuster deal yesterday that rocked the beverage world, Belgium's Interbrew agreed to buy a majority stake in Brazil's AmBev for $11.9 billion, creating the world's leading brewer by volume.

The merged company, to be called InterbrewAmbev, or InterBev for short, will control about 14% of the world's market share, ranking No. 1 or 2 in more than 20 markets. AmBev also brings a Latin American soft-drink bottling operation to the agreement.

Interbrew is the world's No. 3 volume-ranked beer company and AmBev is No. 5. The new deal pushes the combined company past No. 1 Anheuser-Busch, based in St. Louis.

Once completed, the deal will give Interbrew, whose brands include Stella Artois, Beck's, Bass Ale, Rolling Rock and Labatt Blue, a 57% stake and 84.9% of voting interest of AmBev. AmBev, maker of Brahma beer, will take control of Interbrew's Canadian subsidiary Labatt, American brand Rolling Rock and its Mexican Femsa operations.

The new organization will focus on a trio of powerhouse brands -- Stella Artois, Beck's and Brahma -- as its global flagship brands, while promoting others regionally or locally.

Unified operation for Americas
"A unified operation for the Americas, from Canada to Argentina, is a very exciting prospect," Marcel Herrmann Telles, AmBev co-chairman, said in the statement.

"For Interbrew, it also represents an opportunity to enter some of the fastest growing beer markets in the world," said John Brock, Interbrew's CEO.

Three groups of stockholders control AmBev ordinary shares, including Braco, a Brazilian holding company for AmBev's controlling shareholders; Fundacao Antonio e Helena Zerrenner, a Brazilian health benefits foundation for mostly AmBev employees and their dependents; and AmBev outstanding public shareholders. Dutch foundation Stichting Interbrew, which represents the company's founding families, is the majority owner of Interbrew. These majority shareholder groups will share equal board seats on Interbev's board with equal voting rights in a combined shareholding structure.

Executive leadership
When the deal closes in the second half of 2004, Pierre Jean Everaert will become chairman of InterbrewAmBev and Mr. Brock will become CEO. The company board will include 14 members, with four appointed by each company and six independent directors. Both companies will continue to trade shares on their own exchanges. Headquarters for Interbev will be in Leuven, Belgium, while headquarters for AmBev will be in Sao Paulo, Brazil. AmBev will have twocCo-CEOs, one for North America and one for Latin America, both reporting to the AmBev board based in Brazil.

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