MEXICO: Modelo rating hit by A-B InBev merger possibility

Author: just-drinks.com editorial team | 24 July 2007

A local broker has lowered its coverage of Mexican brewer Grupo Modelo.

Banamex, which is owned by Citigroup, said yesterday (23 July) that it has reduced its rating of Modelo to 'hold' from 'buy'. The broker also cut its target price for Modelo's shares to MXN62 from MXN69.

Banamex cited uncertainty about a possible merger between InBev and Anheuser-Busch, which holds a 50% stake in Modelo.

Earlier this week, Citigroup updated its coverage of several global brewers, including InBev and SABMiller, moving them to 'buy' from 'hold'. The broker said that it expects "an alliance between Anheuser-Busch and InBev" within the next two years to be a 70% possibility.

Earlier this year, Modelo and Carlsberg sealed an agreement whereby Modelo will import and distribute the Danish brewer's brands in Mexico by the second half of this year.

Sectors: Beer & cider

Companies: Modelo, InBev, Anheuser-Busch, SABMiller, Carlsberg