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Family business roundup: Acquisitions for Berkshire Hathaway and Bel; AB InBev and News Corp divest

Some large family-controlled businesses have spotted new opportunities recently – in both new markets and through acquisitions. Berkshire Hathaway and Bell Group have both made purchases, while AB InBev has announced plans to restructure as it looks to complete its takeover of brewer Modelo.

Some large family-controlled businesses have spotted new opportunities recently – in both new markets and through acquisitions. Berkshire Hathaway and Bell Group have both made purchases, while AB InBev has announced plans to restructure as it looks to complete its takeover of brewer Modelo. Meanwhile, News Corporation has sold one of its digital brands.

AB InBev
Family-controlled Anheuser-Busch InBev – the world's largest brewer – announced on 14 February that it is divesting some of its rights to certain beer brands.

The move is part of its efforts to convince US regulators to approve its bid to take full control of Mexico's Modelo – the regulators delayed the bid last month, arguing it would deter competition in the US and lead to price increases. Had it gone ahead in its original form, AB InBev would have controlled 46% of the $80 billion-a-year (€60 billion) US beer market, according to the Financial Times. AB InBev's Bud Light brand is one of the US's best-selling beers, while Modelo's Corona is a very popular import.

AB InBev already has a 50% stake in Modelo, but a full takeover would give it even greater access to the rapidly developing Mexican beer market. To make the $20 billion takeover acceptable, AB InBev has agreed to sell its rights to the Corona and Modelo beer brands in the US to Constellation Brands, a wine company, for $2.9 billion. As part of the deal Constellation will get AB InBev's Mexico brewery to ensure it has control of the supply of the two brands.

Once the takeover is concluded, AB InBev plans to sell Modelo's 50% stake in Crown Imports – Modelo's US venture – to Constellation for $1.85 billion.

Berkshire Hathaway
Elsewhere in the US, Warren Buffet's Berkshire Hathaway announced on 14 February it had agreed to buy iconic food-producer Heinz for $28 billion. The deal is a partnership with private equity firm 3G Capital and is the largest ever in the food industry, according to Berkshire Hathaway.

Heinz shareholders will receive $72.50 per ordinary share and its board of directors has unanimously approved the deal. The business's headquarters will remain in Pittsburgh once the sale has been finalised.

Buffett, who is chairman and chief executive of Berkshire Hathaway, said in a statement: “Heinz has strong, sustainable growth potential based on high-quality standards, continuous innovation, excellent management and great tasting products."

Bel Group
In Europe, France's Bel Group – controlled by the Fievet family – reached an agreement on 7 February with Queseria Menorquina to buy its Tranchettes brand through its Spanish subsidiary Bel Espana.

Bel Group is already established in the Spanish processed cheese market with its Laughing Cow brand, but Tranchettes will be its first sliced cheese product in Spain. Under the terms of the deal Queseria Menorquina will continue to produce the product on behalf of Bel Espana.

The deal is still subject to the approval of the Queseria Menorquina shareholders, and the decision will be taken at a meeting at the end of February. A spokesman for Bel Group told CampdenFB the value of the deal would not be published until after the sale has been finalised.

News Corporation
Meanwhile, Rupert Murdoch's News Corporation sold its online gaming subsidiary IGN Entertainment to Ziff Davis – a subsidiary of business communications company j2 Global – on 4 February.

News Corp bought IGN in 2005 for $650 million (€486 million), but has not disclosed the value of its recent sale. It is another high-profile sale of a digital asset by News Corp, following the sale of Myspace in 2011 for an estimated $545 million loss.

Chow Tai Fook
Hong Kong-based conglomerate Chow Tai Fook has formed a partnership with luxury watchmakers Baume & Mercier to distribute its watches in Chow Tai Fook stores in mainland China. Founded as a jewellery business, Chow Tai Fook, which is owned by the Cheng family, now has subsidiaries in property, hotels, transport and telecommunications.

Baume & Mercier – a subsidiary of the Rupert family's Richemont Group – already has 70 outlets in China. The watchmaker said in a statement: “The joint venture partnership is poised to further extend Baume & Mercier’s presence and raise its brand awareness in Mainland China.”  

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