A loan made by the World Bank to Bavaria three years ago is to be converted into shares in the Colombian brewer. The bank is converting the US$30m loan following a leap in Bavaria's share price after it said it was considering a merger with global brewers keen on gaining a foothold in Latin America.

In a letter to Colombia's Securities Superintendency, Bavaria said that the International Finance Corporation (IFC), the World Bank's private sector lending arm, "has exercised its option to convert the total value of the loan into ordinary Bavaria stock."

The letter, which was signed by Bavaria's president Ricardo Obregon, said that, in order to repay the World Bank, the company would create 2.36m shares, equivalent to almost 1% of the circa 245.2m shares in circulation at the end of 2004.

Recent speculation that Bavaria may be ripe for a merger or takeover led the Colombian company to state last week that no offers had been received. Share prices have leapt by 44% so far this year on the back of such speculation.