Seale & Associates Creative Solutions. Trusted Advice.

ALCOHOLIC IN MEXICO

AUGUST 2018 INDUSTRY REPORT ALCOHOLIC DRINKS INDUSTRY IN MEXICO:

The alcoholic beverages industry consists on the production and distribution of beverages containing a concentration of ethanol in its composition equal to or greater than 1% of its volume ▪ There are two types of alcoholic beverages: fermented (wine, , cider, etc.) which come from fruits or cereals, and distilled (brandy, , vodka, etc.) and these are obtained by removing a part of the water contained in fermented beverages through the application of heat

In 2017, the value of the industry in Mexico increased to MX$612,763 million of sales, an increase of 13% compared to 2016; and to 8,291 million liters, a growth of 5% over 2016

▪ Beer is the most popular , representing 93.6% of the total volume consumed and 66.5% of total sales in 2017

▪ In sales volume, the industry presented a Compound Annual Growth Rate (CAGR) (2012- 2017) of 4.3% and a total growth between 2012 and 2017 of 23.3%

▪ In terms of sales value, the industry had a CAGR (2012-2017) of 9.6% and a total growth between 2012 and 2017 of 58.4%

▪ By category, the wine presented the highest growth in both volume and sales, presenting a CAGR (2012-2017) of 8.2% and 13.2% respectively

66.5% 25.8% 6.1% 1.6%

BEER SPIRITS WINE OTHERS*

% of Consumption in Sales Value per Drink *Others: RTD / Premixes (1.55%) y Cider / Perry (0.05%)

Alcoholic Drinks Mexico 2018 Sources: Euromonitor, BMI Research Seale & Associates Creative Solutions. Trusted Advice. VALUE OF SALES AND VOLUME BY CATEGORY IN MEXICO

7,758.4

Beer $407.3

271.5 Spirits $158.0 Sales Value by Category MX$ Billion 107.3 Total Revenue US$612.8 Billion Wine $37.5

149.8 RTD / Premixes $9.5 Sales by Volume by 3.6 Category Cider $0.2 Million of liters Total liters: 8,290.7 million

Alcoholic Drinks Mexico 2018 Sources: Euromonitor, BMI Research Seale & Associates Creative Solutions. Trusted Advice. By 2022, it is estimated that the industry in Mexico will reach a volume of 9,419 million liters and MX$764,927 million in sales ▪ A CAGR (2017-2022) of 2.6% in volume and 4.5% in sales is expected

▪ The wine will maintain the highest growth with a CAGR (2017-2022) of 7.6% in volume, while beer and spirits will have a CAGR (2017-2022) of 2.5% and 3.0% respectively

$765.0 $735.9 $706.6 $677.0 $646.5 $612.8

Industry Sales

MX$ Billions

Forecast Historical

2017 2018 2019 2020 2021 2022

Grupo Modelo 53.6%

Heineken México 37.8%

Brown-Forman Corp 0.9%

Pernod Ricard 0.8%

Molson Coors 0.5%

Diageo 0.4% Market Share 2017 By Volume Grupo Cuervo 0.4%

Others 5.6%

Seale & Associates Alcoholic Drinks Mexico 2018 Sources: Euromonitor, BMI Research Creative Solutions. Trusted Advice. SALES BY CATEGORY: OFF-TRADE VS ON-TRADE

The alcoholic beverage industry places its products through two types of distribution channels: On- trade, where the distribution is through channels related to its direct consumption such as bars, restaurants, hotels, etc., and Off-trade, which is through supermarkets, convenience stores, wholesalers, etc.

Wine 65.60% 34.40% Wine 36.30% 63.70%

Spirits 73.80% 26.20% Spirits 29.90% 70.10%

RTD / Premixes 94.40% 5.60% RTD / Premixes 78.30% 21.70%

Cider 92.10% 7.90% Cider 77.60% 22.40%

Beer 78% 22% Beer 52.40% 47.60%

On-Trade Off-trade On-Trade Off-trade Sales in Value by Distribution Sales in Volume by Distribution Channel 2017 Channel 2017

Tatal value sales MX$ billion Total volumen sales in liters Beer $407.3 Beer 7,758.4 Spirits $158.0 Spirits 271.5 Wine $37.5 Wine 107.3 RTD / Premixes $9.5 RTD / Premixes 149.8 Cider $0.2 Cider 3.6

Seale & Associates Sources: Euromonitor, BMI Research Alcoholic Drinks Mexico 2018 Creative Solutions. Trusted Advice. OFF-TRADE DISTRIBUTION

26.9% Specialists

10.9% Hypermarkets 20.2% Convenience Stores Grocery 43.0% Small Grocers 96.6% Retailers 22.8% Independent Grocers 7.3% Supermarkets

99.8% Store-Based 8.5% Discounters

1.7% Department Stores 3.3% Mixed Retailers 1.6% Warehouse Clubs

0.2% Non-Store Retailing 0.2% Internet Retailing

Seale & Associates Alcoholic Drinks Mexico 2018 Sources: Euromonitor, BMI Research Creative Solutions. Trusted Advice. EXPORTS In 2017, the export of tequila and reached US$1,388.9 million, equivalent to 211 million liters, representing an annual growth of 7.1% in volume; while the beer industry in Mexico exported US$3,768.0 million, corresponding to 3,300 million liters and a growth in volume of 2.8% compared to 2016; 30% of the national production of beer is for export.

Of the total exports of beer in the world, Mexico had a market share of 21.3% during 2016, being the main exporter of beer in the world since 2010, followed by the Netherlands (14.4%) and Belgium (11.0%)

Rest of the World 9.1%

China 1.2% Destination of Beer Exports 2016 % With Rescpect to Total Exports by Volume Canada 1.8%

Chile 2.3%

UK 2.7%

Australia 3.0%

United States 79.9%

$1,850.8 $640.0 $1,553.5

$548.0

May-18 May-18 May-18 May-18

Accumulated Export of Beer to Accumulated Export of Tequila / May Mezcal to May US$ Million US$ Million

Sources: Banxico, Cerveceros de México, Consejo Seale & Associates Alcoholic Drinks Mexico 2018 Regulador del Tequila Creative Solutions. Trusted Advice. BEER

The beer sector is the most important within the agroindustrial activity in Mexico. Beer exports represents 23.0% of the agroindustrial exports of the country, with a value of US$3,768 million in 2017. In the same year, the beer industry in Mexico produced 11,000 million liters, making Mexico the fourth beer producer worldwide.

Mexico is the leading exporter of beer in the world Mexico is the sixth beer consumer in the world, with a per capita CAGR (2017-2022) of consumption of 60-65 2.5% in volume and 4% in liters per year sales value is expected

The trade balance of Main beer producers: the beer sector Zacatecas, Coahuila, achieved a surplus of Nuevo León, CDMX US$3,580 million

2017 production reached 30,900 bottles

TOP 3 COMPANIES:* TOP 3 BRANDS:*

57.3% Extra 24.1%

40.4% Tecate Light 16.8%

0.6% Victoria 15.8%

*By volume market share Seale & Associates Alcoholic Drinks Mexico 2018 Sources: Cerveceros de México, INEGI, Euromonitor Creative Solutions. Trusted Advice. CRAFT BEER IN MEXICO

The craft beer is made following a "recipe" of its own, by brewers who give it a distinct and personal flavor. Its production is limited, offering flavors and textures different from the industrial brands. Currently, these breweries represent 0.1% of the total volume market in the country, with 635 formal producers.

Year 2012 2013 2014 2015 2016 2017

% Growth 43% 68% 77% 43% 62% 59%

Sales in million 1.05 1.52 2.55 4.52 6.46 10.44 liters

MAIN PRODUCER STATES BY VOLUME:

#1 Jalisco - 34% #2 Nuevo Leon - 15% #3 - 8%

Sources: Cerveceros de México, Deloitte, Cervexxa Seale & Associates Alcoholic Drinks Mexico 2018 Artesanal Mexicana Creative Solutions. Trusted Advice. SPIRITS

The spirits presented a growth in volume of 3.0% in 2017, reaching the amount of 272 million liters. For 2022, it is expected to reach a production of 315 million liters. The average price of the spirits is MX$236 per liter. Spirits have a volume distribution of 74.0% On-trade, and sales value of 70.0% Off- trade. The main categories are the following:

Tequila & Mezcal SALES 2017 HISTORICAL CAGR FORECAST CAGR 2012-2017 2017-2022

• 109,311 million liters • 3.3% Volume • 2.1% Volume

• MX$56,545 million • 9.8% Sales • 3.9% Sales

Whisky

• 48,924 million liters • 10.6% Volume • 5.0% Volume

• MX$61,724 million • 15.8% Sales • 5.8% Sales

Rum

• 25,649 million liters • 2.2% Volume • 2.3% Volume

• MX$11,352 million • 5.7% Sales • 3.3% Sales

Brandy & Cognac

• 26,637 million liters • -1.1% Volume • 1.3% Volume

• MX$10,148 million • 2.7% Sales • 2.4% Sales

Seale & Associates Alcoholic Drinks Mexico 2018 Source: Euromonitor Creative Solutions. Trusted Advice. SPIRITS

TOP 3 COMPANIES:* TOP 3 BRANDS:*

12.2% Rancho Escondido 8.2%

11.5% Torres 3.7%

8.2% 3.5%

*By volume market share

Seale & Associates Alcoholic Drinks Mexico 2018 Source: Euromonitor Creative Solutions. Trusted Advice. MEZCAL

The mezcal can come from more than 12 different agave species, although the most commonly used species is the agave angustifolia (agave espadín) and can also be mixed with different agaves, while the tequila only comes from the tequilina agave (blue agave).

More than 80% of the During 2017, 2.8 million production comes from liters were exported to the state of 52 countries

By 2017, there are more than 560 mezcal brands In 2017, nearly 4 million liters were produced, a growth of 32% compared to 2016

Mezcal has an appellation of origin in 500,000 km2 distributed in 9 states: Guanajuato, Durango, San Luis Potosi, Zacatecas, Oaxaca, Tamaulipas, Michoacan, Guerrero and Puebla

MAIN DISTRIBUTORS: REPRESENTATIVE BRANDS:

Sources: Huffington Post, Consejo Regulador del Alcoholic Drinks Mexico 2018 Seale & Associates Mezcal, El Financiero Creative Solutions. Trusted Advice. WINE

The wines had a growth of 8% in volume during 2017, with 107 million liters. By 2022 a CAGR (2017- 2022) of 8% is expected, reaching 155 million liters. The per capita consumption in Mexico is 0.6 liters. The average price is MX$194 per liter. It is classified in still wines (white, red and rosé), in fortified wines and in sparkling wines.* By volume they have a 65% Off-trade distribution, and by sales value a 64% On-trade.

SALES 2017 HISTORICAL CAGR FORECAST CAGR Still Wines 2012-2017 2017-2022

• 83.2 million liters • 9.3% Volume • 8.1% Volume

• MX$27,393 million • 14% Sales • 9.6% Sales

• 80% of the total sales correspond to red Fortified Wines wine

• 10.3 million liters • -0.1% Volume • 0.1% Volume

• MX$3,382 million • 4.6% Sales • 0.9% Sales

Sparkling Wines

• 13.8 million liters • 9.9% Volume • 15.6% Volume

• MX$6,767 million • 14% Sales • 10.2% Sales

TOP COMPANIES BY CLASSIFICATION:* TOP BRANDS BY CLASSIFICATION:*

15.9% L.A. Cetto 9%

89.6% Tres Coronas 89.6%

92.6% Moët & Chandon 66.5%

*Classification by vinification methods

Alcoholic Drinks Mexico 2018 Sources: Euromonitor Seale & Associates Creative Solutions. Trusted Advice. VALLE DE GUADALUPE

The Guadalupe Valley, located between the municipalities of Tecate and Ensenada in the north of the state of Baja California, is the main wine-growing area of the country, with about 90% of the national wine production. Its area comprises 10.000 hectares of cultivation, with an approximate of 72 wineries in its different valleys.

The varieties of white grapes grown in this area are Riesling, Chardonnay, Chenin Blanc, Moscatel, Gewurztraminer, Sauvignon Blanc, Colombard and Palomino; among the red grapes are Cabernet Sauvignon, Anglianico, Cabernet Franc, Grenache, Barbera, Nebbiolo, Merlot, Pinoit Noir, Zinfandel, Tempranillo, Semillón and Syrah.

SOME VINEYARDS IN THE GUADALUPE VALLEY

Seale & Associates Alcoholic Drinks Mexico 2018 Sources: El Universal, Tips para tu viaje, UNAM Creative Solutions. Trusted Advice. DATA AND TRENDS OF THE ALCOHOLIC DRINKS INDUSTRY IN MEXICO

• Most consumed alcoholic drinks by region:

▪ Northwest: Beer

▪ Northeast: Beer and whisky

▪ Central Mexico: Brandy, tequila and rum

▪ West: Tequila and mezcal

▪ South and souteast: Beer and vodka

• Whiskey will maintain the highest growth among alcoholic beverages, both in volume and in sales value

• A greater consumption "at home" has replicated consumption in public spaces (bars, clubs, etc.)

• There is an increase in sales in the category of premium drinks thanks to the culture of mixology

• Wine consumption has increased in the last five years and growth is expected to continue due to greater curiosity on the part of consumers and the introduction of wines with more affordable prices

• International distilleries increasingly show an interest in mezcal, making acquisitions in recent years because of the increased popularity of this beverage

• Craft beer is the second favorite alcoholic beverage among Mexicans (14.0% of preferences), after industrial beer (53.0%)*

Sources: Estadística Aplicada, Deloitte, Euromonitor, El Universal Seale & Associates Alcoholic Drinks Mexico 2018 *Survey applied by Deloitte Creative Solutions. Trusted Advice. CURRENT MARKET SITUATION COMPARABLE PUBLIC COMPANIES

Annual Average EV / 8/3/18 Price Revenue EBITDA Mkt. Cap. Enterprise EBITDA Company Country US$M Margin US$M Value EV / EV / 8/3/18 2015 2016 2017 EBITDA Revenue Anheuser-Busch InBev SA/NV BEL $100.64 $56,427 38.4% $196,925 $313,162 13.9x 15.6x 18.3x 14.3x 5.6x

Kweichow Moutai Co., Ltd. CHN $99.43 $10,186 64.6% $124,904 $113,108 10.2x 13.0x 19.7x 17.7x 11.5x

Diageo plc GBR $36.75 $16,049 33.9% $90,211 $104,264 16.7x 17.5x 17.7x 17.9x 6.6x

Ambev S.A. BRA $5.21 $12,858 41.5% $81,825 $80,585 15.2x 13.3x 16.0x 14.5x 6.0x

Heineken Holding N.V. NED $98.54 $26,045 20.4% $28,382 $52,951 8.5x 8.9x 9.1x 9.6x 2.0x

Pernod Ricard SA FRA $163.09 $10,485 28.0% $43,060 $51,843 16.3x 14.4x 15.5x 17.1x 4.9x

Constellation Brands, Inc. USA $214.01 $7,704 36.2% $40,834 $50,740 16.9x 18.0x 17.6x 13.9x 6.6x

Wuliangye Yibin Co.,Ltd. CHN $9.62 $5,437 43.2% $37,328 $31,286 9.6x 10.5x 16.4x 14.4x 6.3x

Asahi Group Holdings, Ltd. JPN $45.78 $19,420 14.8% $20,972 $30,410 10.3x 9.3x 13.5x 10.4x 1.6x Jiangsu Yanghe Brewery Joint- CHN $17.23 $3,464 44.3% $25,959 $25,424 13.3x 13.2x 15.9x 17.7x 7.9x Stock Co., Ltd. Kirin Holdings Company, Limited JPN $25.08 $16,422 14.3% $22,317 $27,128 9.3x 9.7x 11.7x 10.4x 1.7x

Brown-Forman Corporation USA $53.99 $3,291 34.1% $26,025 $28,342 20.4x 18.9x 20.3x 25.4x 8.7x

Molson Coors Company USA $69.20 $10,880 22.4% $14,935 $25,229 13.1x 18.8x 17.5x 10.3x 2.3x

Carlsberg A/S DEN $120.82 $9,645 20.9% $18,389 $22,019 9.8x 9.9x 10.0x 10.6x 2.3x Thai Beverage Public Company THA $0.57 $6,750 15.2% $14,354 $21,278 15.7x 17.4x 15.7x 15.4x 3.3x Limited Resources Beer (Holdings) HKG $4.47 $4,762 12.6% $14,507 $14,687 17.1x 10.4x 17.2x NR 3.2x Company Limited Co.,Ltd CHN $7.13 $1,767 34.5% $10,442 $9,193 24.6x 22.9x 25.0x 16.4x 5.7x

Davide Campari-Milano S.p.A. ITA $8.43 $2,074 28.2% $9,703 $10,813 14.3x 16.1x 20.0x 18.6x 5.2x

Treasury Wine Estates Limited AUS $13.98 $1,846 24.4% $9,976 $10,347 16.2x 23.2x 19.4x NR 5.6x

Shanxi Xinghuacun Fen Wine CHN $7.71 $1,157 25.2% $6,679 $6,506 35.9x 21.1x 24.6x NR 6.3x Factory Co.,Ltd. Union de Cervecerias Peruanas PER $6.58 $1,595 48.1% $8,439 $8,327 10.1x 10.6x 16.0x 10.8x 5.2x Backus y Johnston SAA Molson Coors Canada Inc. CAN $73.81 $2,585 16.2% $1,297 $7,537 18.5x 21.6x 109.8x 12.5x 2.9x

Rémy Cointreau SA FRA $139.19 $1,388 22.9% $6,960 $7,290 23.0x 21.2x 23.9x NR 5.6x

United Spirits Limited IND $8.97 $1,320 14.0% $6,143 $6,514 142.1x 37.6x 39.5x NR 5.2x Tsingtao Brewery Company CHN $5.22 $3,983 9.7% $7,418 $5,487 15.1x 12.7x 13.2x 14.6x 1.3x Limited Anhui Gujing Distillery Co., Ltd. CHN $6.56 $1,221 25.6% $5,385 $5,168 16.9x 16.4x 18.8x 17.4x 4.4x Anadolu Efes Biracilik ve Malt TUR $4.09 $3,261 16.4% $2,421 $5,054 12.6x 11.7x 12.2x 11.9x 1.9x Sanayii Anonim Sirketi Saigon Beer - Alcohol - Beverage VIE $8.58 $1,548 15.5% $5,500 $5,111 0.0x 24.0x 27.7x 19.4x 3.5x Corporation

NR: Not Relevant Mean 14.8x 4.8x

Median 14.5x 5.2x

Sources: Capital IQ, Mergermarket Seale & Associates Alcoholic Drinks Mexico 2018 Creative Solutions. Trusted Advice. GLOBAL TRANSACTIONS

Size EV / EV / Date Target Country Description Buyer US$M EBITDA Revenue

Jun-18 Sichuan Swellfun Co.,Ltd CHN Alcoholic drinks producer Diageo plc $940 NR 12.3x

Apr-18 Accolade Wines Australia Limited AUS Wine producer The Carlyle Group L.P. $768 - -

Shanxi Xinghuacun Fen Wine Factory Feb-18 CHN Wine producer CRE Yang Company Limited $819 29.1x 7.2x Co.,Ltd.

Dec-17 Tsingtao Brewery Company Limited CHN Brewery Tsingtao Brewery Group, entre otros $1,081 7.1x 0.8x

Saigon Beer - Alcohol - Beverage Dec-17 VIE Alcoholic drinks producer Vietnam Beverage Company Limited $4,939 NR 6.6x Corporation

Dec-17 Cervecería Nacional Dominicana, S.A. DOM Brewery Ambev S.A. $927 - -

Nov-17 Stock in San Miguel Brewery PHI Brewery San Miguel Pure Foods Company $2,555 - -

Oct-17 4 Subsidiaries of China Food Ltd IVB Spirits and wine China Foods (Holdings) Limited $649 - 1.9x

International Beverage Holdings Oct-17 Myanmar Distillery MYA Distillery $742 - - (Singapore) Pte. Limited

Jun-17 Casamigos Spirits Co. USA Tequila producer Diageo North America Inc. $1,000 - -

Feb-17 Brasil Kirin Holding S.A. BRA Alcoholic drinks producer Bavaria S.A. $707 - -

Dec-16 Beer business in Europe CZE Brewery Domino's Pizza Group plc $7,774 - -

Oct-16 , Obregon operatoin MEX Brewery Constellation Brands, Inc. $600 - -

Constellation Brands Canada, Inc. Oct-16 CAN Wine producer Ontario Teachers' Pension Plan Board $783 - - (nka:Arterra Wines Canada, Inc.)

Apr-16 SABMiller plc, Europa GBR Brewery Asahi Group Holdings, Ltd. $2,901 - -

China Resources Breweries China Resources Beer (Holdings) Mar-16 CHN Brewery $1,600 - 0.7x Limited Company Limited

Jan-16 Brown-Forman Corporation USA Two liquor brands Sazerac Company, Inc. $543 - -

Nov-15 Home Brew Mart, Inc. USA Alcoholic drinks producer Constellation Brands, Inc. $1,021 NR NR

Nov-15 MillerCoors LLC USA Brewery Molson Coors Brewing Company $12,019 12.4x 2.7x

Oct-15 Wine operation in the US and UK USA Wine operatoin Treasury Wine Estates Limited $600 7.9x -

SABMiller plc (nka:ABI SAB Group Sep-15 GBR Alcoholic drinks producer Anheuser-Busch InBev SA/NV $113,451 18.5x 7.5x Holding Limited)

Jul-15 Myanmar Brewery Ltd. MYA Brewery Kirin Holdings Singapore Pte, Ltd. $554 13.7x 4.9x

NR: Not Relevant Mean 14.8x 4.9x

Median 13.1x 4.9x

Seale & Associates Alcoholic Drinks Mexico 2018 Sources: Capital IQ, Mergermarket Creative Solutions. Trusted Advice. GLOBAL REPRESENTATIVE TRANSACTIONS

Summary Target Buyer

On September 17, 2015, Anheuser-Busch InBev, a Belgian alcoholic beverage company, announced the acquisition of SABMiller PLC, a British brewer, for US$113,451 million, representing implied multiples of 18.5x EBITDA and 7.5x sales

On November 11, 2015, Molson Coors Brewing Company, a US brewery, announced the acquisition of the remaining 58% stake of MillerCoors LLC, a US beer company owned by ABInBev / SABMiller, for US$12,019 million, representing implied multiples of 12.4x EBITDA and 2.7x sales

On December 13, 2016, Asahi Group Holdings, Brewery in Czech Japanese alcoholic beverage company, Republic announced the acquisition of a beer belonging to production business, located in the belonging to ABInBev / SABMiller, ABInBev / for US$7,774 million SABMiller

On December 18, 2017, Vietnam Beverage Company Ltd., a Vietnamese company, announced the acquisition of Saigon Vietnam Corporation, a brewer in Vietnam, for US$4,939 Beverage million, representing implied multiples of 35.6x Company Ltd. EBITDA and 6.6x sales

On April 19, 2016, Asahi Group Holdings, a Japanese alcoholic beverage company, announced the acquisition of SABMiller plc, Europe, an English brewer, for US$2,901 million

Europe

Seale & Associates Sources: Capital IQ, Mergermarket Alcoholic Drinks Mexico 2018 Creative Solutions. Trusted Advice. GLOBAL REPRESENTATIVE TRANSACTION #1

Anheuser-Busch InBev, announced the acquisition of The merger combines the two SABMiller PLC, for biggest breweries in the world US$113,451 million

BUYER TARGET

ANHEUSER-BUSCH INBEV, ANNOUNCED THE ACQUISITION OF SABMILLER PLC

With the transaction, the new company achieved a 28% global It is the thrid biggest market share and US$55 billion in transaction in the history, revenue and the biggest one in the UK The transaction represented implied multiples of 18.5x EBITDA and 7.5x sales

Alcoholic Drinks Mexico 2018 Sources: Capital IQ, Forbes, BBC Seale & Associates Creative Solutions. Trusted Advice. GLOBAL REPRESENTATIVE TRANSACTION #2

Molson Coors, announced the Miller Coors was founded in acquisition of the remaining 2017 as a joint company 58% of Miller Coors belonging between SABMiller and Molson to ABInBev / SABMiller, for Coors for their operations in the US$12,019 million US

BUYER TARGET MOLSON COORS, ANNOUNCED THE ACQUISTION OF MILLER COORS

Molson Coors became the # 2 With the transaction, Molson brewer in the United States with a Coors also acquires the 27% market share portfolio of brands outside the United States.

The transaction represented implied multiples of 12.4x EBITDA and 2.7x sales

Seale & Associates Alcoholic Drinks Mexico 2018 Sources: Capital IQ, Mergermarket, MolsonCoors Creative Solutions. Trusted Advice. MEXICAN REPRESENTATIVE TRANSACTIONS

Summary Target Buyer

On June 29, 2012, Anheuser-Busch InBev, a Belgian alcoholic beverage company, announced the acquisition of the remaining 49.7% stake of Grupo Modelo, a Mexican brewer, for US$20,100 million, representing implied multiples of 13.4x EBITDA and 4.2x sales

On January 11, 2010, Heineken Holding N.V. and Heineken N.V., Dutch brewer, announced the acquisition of Cuauhtémoc Moctezuma Holding, Mexican brewing company owned by FEMSA, for US$7,347 million

On February 14, 2013, Constellation Brands, Inc., a US alcoholic beverage company, announced the acquisition of Compañía Cervecera de Coahuila belonging to Grupo Modelo, a Mexican brewer, for US$2,900 million.

On November 3, 2014, Tequila Cuervo La Rojeña, Mexican tequila producer, announced the acquisition of The Old Bushmills Distillery belonging to Diageo, distillery in Ireland of whiskey, for US$704 million

On October 31, 2016, Constellation Brands, Inc., a US alcoholic beverage company, Brewery in announced the acquisition of Cervecera in Ciudad Obregón Ciudad Obregón, Sonora belonging to Grupo Modelo, for US$600 million.

Seale & Associates Sources: Capital IQ, Mergermarket Alcoholic Drinks Mexico 2018 Creative Solutions. Trusted Advice. MEXICAN REPRESENTATIVE TRANSACTION #1

In 2012, both companies Anheuser-Busch InBev, produced 400 million announced the acquisition of hectoliters of beer and sales of the remaining 49.7% stake in US$47 million in 24 countries Grupo Modelo, for with 150,000 employees US$20,100 million

BUYER TARGET ANHEUSER-BUSCH INBEV, ANNOUNCED THE ACQUISTION OF GRUPO MODELO

With the acquisition, Anheuser-Busch InBev paid Anheuser-Busch Inbev US$9.15 per share to Grupo increased its portfolio to Modelo’s shareholders more than 200 brands and 4 global brands

The transaction represented implied multiples of 13.4x EBITDA and 4.2x sales

Seale & Associates Alcoholic Drinks Mexico 2018 Sources: Capital IQ, Mergermarket, Expansión Creative Solutions. Trusted Advice. MEXICAN REPRESENTATIVE TRANSACTION #2

Heineken Holding N.V. y Heineken N.V., announced the FEMSA sought to focus on its acquisition of Cuauhtémoc divisions of Coca-Cola FEMSA Moctezuma Holding, S.A. de and OXXO C.V., property of FEMSA, for US$7,347 million

TARGET BUYER HEINEKEN N.V., ANNOUNCED THE ACQUISITION OF CUAUHTÉMOC MOCTEZUMA HOLDING, S.A. DE C.V.

With the transaction, FEMSA Heineken assumed the debt of obtained a 20% stake in the FEMSA Beer division of Heineken Group US$2,100 million

The transaction included the sale of 83% stake of FEMSA to Heineken

Seale & Associates Alcoholic Drinks Mexico 2018 Sources: Capital IQ, Mergermarket, Expansión Creative Solutions. Trusted Advice. REPRESENTATIVE MEXICO ENGAGEMENTS

intelectiva® has acquired has merged with merged its merged its has acquired has acquired beverage division beverage division with with KFC Costa Rica a business of from

has partnered with has partnered with has been acquired by Corporate Acquisition Acquisition Finance a subsidiary of Advisory Advisory Advisory Services Services Services

has formed a partnership in has formed a has carved out and sold the casting tools business sold partnership to market sold between its concrete pumping and develop oil storage assets in Mexico and distribution in Corporate to Mexico with Finance to and to Advisory Services

has sold has acquired Holding company of Cosmocel Química to has been acquired by Corporate Corporate Finance Finance dealers of acquired a 61% stake on

a business unit of Advisory Advisory Services Services

has sold has acquired its sanitaryware business Grupo Galaz, S.A de C.V. has acquired has been acquired by workshop and store in and has been acquired by from Acquisition Advisory to Services

Washington, D.C. | Mexico City | Mexico Contact Seale & Associates Information Creative Solutions. Trusted Advice. James A. Seale President Since 1999, Seale & Associates has been the trusted advisor [email protected] to highly respected public and private companies from around Brett M. Carmel the world, with a track record of success in a diverse range of Senior Managing Director [email protected] industries. Seale is an elite boutique global investment banking firm with extensive experience in mergers and acquisitions Felipe Bueno Viesca Managing Director (M&A), corporate finance advisory, and enterprise level [email protected]

strategy consulting. Our experienced team of professionals are Sergio Garcia del Bosque committed to serving clients with excellence and integrity, Managing Director [email protected] while offering innovative ideas and solutions to address Adan Sierra complex dealings. All securities related transactions are cleared Vice President through Seale Capital, Inc., a registered broker dealer and [email protected]

member of FINRA and SIPC. Carlos Hernandez Vice President ADVISOR TO LEADING COMPANIES WORLDWIDE [email protected]

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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

* * * Sofia Felix Business Development * * * [email protected]

* Multiple engagements CONTACT INFORMATION Andres Cardenas Analyst [email protected]

Armando Rios Analyst [email protected]

Miguel Leal Junior Analyst [email protected]

950 N. Glebe Road 37, Moliere Diego Hernandez Suite 950 Granada Junior Analyst Arlington, Virginia 22203 Mexico City, 11520 [email protected] Phone: +1 (703) 294 6770 Phone: +52 (55) 8000 7463

Please contact us if would like further information about M&A trends and/or specific transaction multiples for your industry.

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