Parties

Labatt and Cervecería Modelo

Relationship between the parties and the Issuer

Cervecería Modelo and the Issuer are under common control of AB InBev.

Object and main terms of the Transactions

The purpose of the Transactions is the import, licensing and distribution of the Corona Products in Canada, manufactured by Cervecería Modelo and part of the Issuer’s portfolio.

In exchange for the import, licensing and distribution of the Corona Products in the referred territory, the Issuer compensates Cervecería Modelo through the payment of a price composed of cost added by a mark-up determined with basis on the regional position of the brands in each country.

Possible involvement of the counterparty, its partners or managers in the decision process concerning the Transactions or the negotiation of the Transactions as representatives of the Issuer

Neither Cervecería Modelo nor its partners or managers participated in the Issuer’s decision concerning the Transactions and their terms, as well as they did not act as representatives of the Issuer on the relevant negotiations.

The Issuer’s decision was made independently, following the rules of the Policy on Transactions with Related Parties and the Bylaws of the Company. The Transactions were analyzed and recommended by the Related Parties and Antitrust Conducts Committee of the Company and, subsequently, were analyzed and approved by the Company’s Board of Directors, provided that no Board member related to Cervecería Modelo and/or to AB InBev participated in the discussions concerning the Transactions nor in the resolutions authorizing their execution.

Detailed justification of the reasons why the management of the issuer considers that the Transactions complied with the commutative conditions or provides for an adequate compensatory payment

The Corona Products are part of the Issuer’s portfolio and are currently manufactured by Cervecería Modelo, owner of the brands related to such products, reason for which there is no need of proposal requests or performance of price submission procedures.

The acquisition of the Corona Products by the Issuer is justified by the part such products play in the Issuer’s long-term commercial strategy, which includes the scaled expansion on the premium segment. As an example, in 2019, the development of Corona in Canada, along with other premium brands of the Issuer’s portfolio, assured our position of leadership in the beer market of the country.

Given the brand’s strength, the Corona Products have high receptivity among different markets (including Canada), presenting strong preference among consumers. Therefore, considering a joint study of growth potential and long-term value creation, the distribution of such products is aligned with the Issuer’s strategy.

The management of the Issuer carried out a detailed analysis of the terms of the Transactions, which were based on conditions previously practiced by Cervecería Modelo with independent distributors (when existent), or conditions observed by other companies controlled by AB InBev that import the same products from Cervecería Modelo (conditions which were established in accordance with a transfer price study prepared by a renowned audit and consulting company), ensuring, therefore, the compliance of such terms with arm’s length business assumptions.