Local brewing giant Femsa is being targeted by three major global players, in deal that could see the company being sold for more than $7.5bn. According to a report in Reuters, citing sources close to the situation, the brewer is being targeted by SABMiller, Heineken and Kirin Holdings.
The report said that “SABMiller and Heineken are in deep discussions, while Kirin has shown some interest”. US firm Molson Coors, which was earlier interested in Femsa, has backed away from any deal. All the groups declined to comment on the report. One source noted, “SABMiller is clearly the front runner, but Heineken is very determined not to lose out to SABMiller as it did in 2005 with Bavaria”.
The sources that Heineken is keen for a deal, and noted that it has close links with FEMSA, with a deal to distribute its beers such as Sol and Tecate in the US. However, analysts said there were concerns about its current debt levels and whether the controlling Heineken family will be willing to dilute their stake. A deal for SABMiller would help the UK-based firm to link its other operations in Latin America with the MillerCoors joint venture. A SABMiller-FEMSA deal could help save an estimated $372m in costs by the third year of a deal, with the figure being much lower for Heineken.
FEMSA is the No 2 player in the Mexican beer market with a share of 42%, and the No 4 player in Brazil with a share of around 7%.
Namnews - Monday 30th November 2009
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