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Miller Pushing Modelo Toward A-B Inbev


more than a year,Anheuser-Busch InBev has endured an increasingly strained relationship with its Mexican partner, Corona brewer Grupo Modelo. But with rivals exploring opportunities to join forces south of the border, A-B and Modelo could be pressured to get closer than ever before.

Femsa SAB, Mexico’s second-largest brewer behind Modelo, is holding merger talks with several companies. Its beer operations are officially on the table, but analysts expect all of Femsa – which is also Mexico’s largest Coca-Cola bottler and the owner of the Oxxo convenience store chain – could ultimately be sold as a single package. Initial estimates value the company at about $9 billion.

Analysts say a merger between Anheuser-Busch/Modelo and Femsa would almost certainly face Mexican antitrust opposition. So observers have generally concluded that SABMiller, the London-based beer giant that owns Miller Brewing among other brands, is the most likely suitor.

Coca-Cola also has the resources to purchase Femsa, though it would have to decide whether it is comfortable moving beyond soft-drinks into alcoholic beverages. Heineken, which is already a minority partner of Femsa’s Kaiser brewery in Brazil, might be able to afford just the beer component of the company, but it is already burdened with debt from its recent acquisition of the United Kingdom’s Scottish & Newcastle.

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Thursday, January 18, 5:31 pm

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