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Categories: Mergers and Acquisitions

Modelo CEO Unaware of InBev-Anheuser Talks

Source: Reuters
09/06/2008

Mexico City, Jun. 7 - Carlos Fernandez, the head of Mexico's top brewer Modelo, is somewhat incredulous that his phone isn't ringing off the hook.

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As chairman and CEO of Modelo, the maker of Corona beer, he is likely to be a critical figure in what may become the biggest consolidation of the global beer industry. But he says investors and bankers are not calling him with proposals.

"So far, no calls. Which actually I am amazed at. If the deal was pretty close, then I'd have some calls." Fernandez told Reuters in an interview.

Fernandez is not only chairman and CEO of Modelo, the world's No.7 brewer with a market capitalization of about $16 billion. He is also on the board at Anheuser-Busch Cos, the result of the top U.S. brewer's 50 percent stake in Modelo.

News reports in recent weeks that Belgium's InBev NV is about to bid $46 billion for Anheuser leave Fernandez, who started working at Modelo as a teenager and inherited the helm from his uncle in 1997, unmoved.

He says as far as he is concerned the talk of a deal is still nothing more than rumors, and he says he hasn't been told of any talks by Anheuser.

"If there are talks or not I am not really aware of it," Fernandez.

Fernandez said Modelo does not have any agreed option to buy Anheuser's 50 percent stake -- as a way of stopping itself being wedded to InBev in a deal -- though there are provisions for the U.S. brewer to consult it if it faces a takeover.

Modelo has a lot of options and will be examining them, he said. Asked whether he thought Modelo would retain its independence over the next year, he said, "Based on what we have seen today, yes."

INDEPENDENT?

Asked if the strategy was to remain independent, Fernandez said: "I can tell you today that we will continue working as we are working today, controlled by Mexicans, and going forward with our own strategy."

Fernandez also said that Anheuser hasn't called him to make any particular proposal. There is speculation in the market that Anheuser might seek to buy the rest of Modelo as a way of protecting itself against any hostile assault from InBev.

And, he says, consolidation of the industry could easily involve other major brewers.

Fernandez said that any consolidation in the industry was just as likely to involve SABMiller Plc or Danish brewer Carlsberg A/S as Anheuser and InBev.

"Who imagined a year ago that Miller and Coors were going to merge in the U.S. -- that was a play no one saw."

SABMiller won approval Thursday for its plan to combine its U.S. operations, the country's second largest, with No.3 Molson Coors Brewing Co.

Last October, SABMiller and Molson Coors said they would combine their U.S. operations to create a business that would have annual sales of $6.6 billion, to become the second-largest U.S. market player behind Anheuser.



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