New York, June 30 - SABMiller Plc Chief Executive Graham Mackay on Monday declined comment on whether the brewer has approached Mexican beermaker Grupo Modelo about a possible merger.
"I can't comment on specific companies," Mackay said, adding however that the company has "been in contact with most major brewers of the world at one time or another."
Sources told Reuters last week that SABMiller, the world's largest brewer, had held informal discussions with Grupo Modelo and InBev NV to explore options, including a merger of Modelo and SABMiller in the event that Belgian-Brazilian InBev succeeds in its proposed $46.3 billion takeover of Anheuser-Busch Cos Inc.
Anheuser-Busch, which makes Budweiser and owns 50 percent of Modelo, has already spurned InBev's $65-per-share offer and proposed its own cost-cutting strategy. But it left the door open to a higher bid and analysts widely expect the price to climb toward $70 per share.
If successful, InBev, maker of Stella Artois and Beck's, would unseat London-based SABMiller as the world's biggest brewer, a title that Mackay brushed off as insignificant.
"That means absolutely nothing," Mackay said on the sidelines of an event in New York to celebrate the launch of MillerCoors, a U.S. joint venture with Molson Coors Brewing Co . He said a measure of sheer volume does not account for growth, profitability or return on investment.
"The beer industry as a whole is not particularly susceptible to economies of scale -- on a global scale. There are very strong economies of scale within individual countries. But on a global scale there are hardly any at all," he said.
SABMiller, maker of Miller Lite, Peroni and Pilsner Urquell has grown through international acquisitions and claims to be well-positioned for growth since most of its worldwide operations are in high-growth developing economies in Latin America, Asia and Africa.
Recent acquisitions include buying Dutch brewer Grolsch earlier this year, the Foster's business and brand in India in 2006 and a majority interest in Bavaria S.A., South America's No. 2 brewer, in 2005.
Analysts have said that InBev's bid for Anheuser will put pressure on SABMiller to look at deals with Mexico's Modelo or FEMSA , Molson Coors or Foster's Group.
NO CHANGE IN U.S.
Mackay, who was CEO of South African Breweries when it agreed to buy U.S. brewer Miller Brewing in 2002 from Philip Morris Cos, said there will be no dramatic impact to the U.S. marketplace if InBev buys Anheuser-Busch.
"I think that no matter what happens -- if a deal goes ahead -- I think the integration and extraction of cost synergies ... will be very distracting or onerous," Mackay said.
"Of course, InBev doesn't have a major position in the United States. We don't think that there's likely to be any dramatic advantage to gain in the short- or medium-term. Any advantage that can be gained in the long term has got to be by different or better management," Mackay said, noting that improving the St. Louis-based brewer may not be that easy.
"I think that one shouldn't get the impression that Anheuser is anything but a very active and competent competitor. When we bought Miller, we were confronted by a general perception of Anheuser as the most competitive -- the most formidable business competitor -- in the world of beer," Mackay said.
"I can't see how things have changed that much in five years."