Constellation Brands on Monday announced plans to acquire a Grupo Modelo brewery in northwestern Mexico to support markets in the western U.S.
The New York-based spirits company plans to spend $600 million to purchase the brewery in Obregon if cleared by regulators in the U.S. and Mexico.
Constellation acquired the U.S. distribution rights to Modelo, Corona and other prominent Mexican beer brands owned by Grupo Modelo after they were sold off to facilitate its acquisition by Anheuser-Busch InBev.
The company is building up breweries elsewhere in Mexico in order to support those fast-growing brands, and the Obregon purchase would make Constellation independent from its current supply agreement with Modelo.
The brewery largely supports that supply agreement currently, so Constellation officials said that the transition should be smooth. Obregon could have four million hectoliters of production with "minimal investment and optimization."
Although Constellation's investment in Mexico will "largely remain the same," the company will revise plans for expanding its brewery in Mexicali.
"We believe this is the right strategy to provide near-term capacity and greater flexibility to support our growth and innovation plans, while allowing for the buildout of our Mexicali brewery over an extended time period," Constellation CEO Rob Sands said in a statement.