Constellation Brands Acquires AB InBev Glass Bottle Factory for $300 Million

By Frazer Jones
Iconic food brands and food processing plants are not the only parts of the industry that are subject to the possibility of a takeover – anything...

Iconic food brands and food processing plants are not the only parts of the industry that are subject to the possibility of a takeover – anything along the supply chain from processing to packaging is fair game. Case in point: Constellation Brands is buying out a glass bottle manufacturing facility and associated warehouse from Anheuser-Busch InBev for a sum of $300 million.

The Nava, Mexico-based glass bottle production plant is adjacent to Nava Brewery, the production facility for Constellation-owned former AB InBev brands like Corona and Negro Modelo. That is reason enough to want to own the bottle production facility, but the buyout comes with even more benefits. For one thing, the plant grounds include both an adjacent warehouse as well as built-in land and rail infrastructure for stronger control over distribution. As another point, there is plenty of room for growth – which is good, because Constellation is planning to ramp up production with a brewery expansion, and will need an increase in packaging production to match.

In order to make the deal happen, Constellation Brands is working with joint venture partner and glass container manufacturing specialist Owens-Illinois, who is chipping in $100 million towards the purchase of the glass bottle production facility itself.

"We are pleased that we have been able to finalize our long-term glass strategy under favorable terms with key industry players," said Rob Sands, president and chief executive officer of Constellation Brands, in the brand’s statement to the media. "We believe this provides the best outcome in terms of quality, flexibility, cost-effectiveness and control for this critical area of our beer production. We look forward to working with our supply partner, Owens-Illinois, who has more than 100 years of experience in producing glass containers. As the world's leading glass producer, O-I is known for high quality standards, has built and expanded dozens of plants, and participates in joint ventures in several different countries throughout the world. We are also pleased with the outcome of our beer glass supply arrangement with Vitro, which provides an optimal sourcing option and enables us to partner with a leader in the beer glass supply industry."

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