Oct 31 (Reuters) - Constellation Brands Inc, owner of Corona and Modelo beer, said on Monday it would buy Obregon Brewery from Grupo Modelo, a subsidiary of Anheuser Busch InBev SA NV, for $600 million.
The company, which submitted the proposal to the U.S. Department of Justice, also raised its 2017 free cash flow forecast to $575 million-$675 million, from the previous forecast of $375 million-$475 million.
Grupo Modelo’s brewery, located in Obregon, Mexico is expected to have four million hectoliters of production capacity after the deal closes, the company said.
Constellation cited the Obregon acquisition and the buildout of its new brewery in Mexicali, Mexico for increasing the free cash flow forecast.
Reporting by Gayathree Ganesan in Bengaluru; Editing by Sriraj Kalluvila