New York, June 22 - Dutch brewer Heineken NV needs to exercise more M&A muscle if it wants to keep up with the consolidation that is changing the global beer industry, according to a Barron's report on Sunday.
Barron's wrote that Heineken has missed out on acquiring valuable targets because it prefers to use cash rather than equity in buying companies. Plus, Barron's said in its June 23 edition, its recent purchase of British brewer Scottish & Newcastle has hurt the stock, since the deal increases Heineken's exposure to slower-growing markets of Western Europe.
Barron's reported that Todd Lowenstein of HighMark Capital Management, which owns shares of Anheuser-Busch Cos Inc, said Heineken needs to act before all valuable assets vanish.
Barron's said a successful takeover of Anheuser by InBev NV could bring about a new era of beer industry consolidation and that Mexico's Femsa could be the next merger target. The paper said Femsa, which makes Sol and Dos Equis beers, could fetch as much as $80 a share, almost double the current price of its American depositary receipts.