London, June 25 - InBev's bid for Anheuser-Busch to create the world's biggest brewer will put pressure on current No. 1 SABMiller to look at deals with Mexico's Modelo or FEMSA, Molson Coors or Foster's.
Analysts say InBev's $46.3 billion bid will spark the London-based SABMiller into action, but with many potential targets controlled by families or trusts, it may take time for the brewer of Miller Lite, Peroni and Grolsch to react.
The focus has settled on Mexican brewers in the scramble for growth and strong brands by the world's top brewers and the nation's two big brewers Modelo and FEMSA are being talked about in the latest round of deals.
Anheuser owns 50.2 percent of Corona-brewer Modelo, but has no management control so Modelo's future has been thrown into the Anheuser-InBev battle, while FEMSA, the maker of Sol, is a favoured target if its controlling trust decides to sell out.
"FEMSA is the prettiest girl at the party and she knows it. And, when you are feeling especially pretty, it is easier to say "yes" to the most handsome boy at the party. That we believe would be SABMiller at this party at this time," said Tom Pirko, president of Bevmark, a California-based advising firm.
Modelo, the world's No 7 brewer, has held informal talks with Anheuser, InBev and SABMiller to explore options, sources familiar with the situation say, but analysts believe the brewer, which is controlled by the Fernandez family, wants to stay independent.
The strained relations between Modelo and Anheuser mean a deal between the two seems unlikely, so most analysts see Modelo happy to swap Anheuser for Stella Artois and Beck's brewer InBev as a partner if InBev's bid for Anheuser is successful.
"Modelo is clearly looking at its options, but we believe it wants to stay independent," said one London-based analyst.
Mexico's No 2 brewer and No 10 in the world FEMSA operates in Mexico, the United States and Brazil, and is attractive to big brewers. But a trust controls 75 percent of its important B shares.
"FEMSA would make a good match for SABMiller, but the company is very conservative and it is not certain the trust would want to sell out," said the London analyst.
FEMSA has over a 40 percent share of Mexico's growing beer market, bought Brazil's third largest brewer Kaiser in 2006 and imports its beers into the United States in a 12-year deal with Heineken until 2017. It is the largest Coca-Cola bottler in Latin America, while SABMiller is also a Coke bottler.
SABMiller says it does not feel any pressure to do a deal, as an InBev-Anheuser deal would not increase the competitive landscape in any region, and adds it could gain if Anheuser is weakened by an InBev deal which led to big cost cutting.
"This would not disadvantage us to any degree outside the U.S., and if anything could be a positive for our new U.S. joint venture," a SABMiller spokesman said.
SABMiller's joint venture with Molson Coors in the United States starts on Monday to give its MillerCoors unit a near 30 percent share of the U.S. beer market and increase competition for Anheuser with its 48 percent share, and could come at a time when the Budweiser brewer's business is being disrupted.
But a full takeover of Molson Coors does not seem imminent with the Molson and Coors families still in control and unlikely to want to cede control so soon after agreeing a major move with SABMiller, analysts said.
SABMiller tried to agree a deal with Molson before Molson and Coors came together in 2005 but this failed and there seems little indication the families want to do a deal which would give SABMiller nearly half the Canadian beer market with Molson beers and a 20 percent stake in Britain with Coors UK.
Earlier this month, the chief executive of Australian drinks maker Foster's Group Ltd Trevor O'Hoy resigned after a profits warning and the announcement of a review of its wine business, with some analysts saying that if the group is split up the Australian beer business would be attractive to SABMiller.
SABMiller announced a joint venture with its partner Coca-Cola Amatil Ltd in 2006 to distribute some of its premium beers like Peroni Nastro Azzurro and Pilsner Urquell in Australia, and then in February this year announced its plans to build a new brewery north of Sydney by 2010.
The two partners are seeking to establish themselves as the third player in the country's alcoholic drinks market, in a beer market dominated by Foster's with a 50 percent share and Lion Nathan Ltd with a 42 percent share.
It was two weeks ago that InBev launched its bid for Anheuser, with an eye to its near half share of the world's most profitable beer market in the United States.
A deal would bring together the second and fourth largest brewers in the world, but all Anheuser has said is that it is examining the bid carefully.