Interbrew mulls Brazilian linkup

2nd March 2004, Comments 0 comments

2 March 2004, BRUSSELS – Belgian brewing giant Interbrew is considering joining forces with its Brazilian counterpart AmBev, a move that could lead to the creation of the second-biggest beer-making company in the world, several Belgian newspapers reported on Tuesday.

2 March 2004

BRUSSELS – Belgian brewing giant Interbrew is considering joining forces with its Brazilian counterpart AmBev, a move that could lead to the creation of the second-biggest beer-making company in the world, several Belgian newspapers reported on Tuesday.

Both Le Soir and La Derniere Huere cited Brazilian press reports suggesting the two brewing firms were having secret discussions about a possible merger.

Interbrew, which is home to Belgian beers such as Stella Artois and Hoegaarden, is already the fourth biggest brewer in the world while AmBev comes in at number five on the list.

But economic analysts cited in Le Soir seemed divided over whether a link-up between the two companies would be of much benefit to Interbrew.

If any potential fusion were on an equal footing with each firm forming half of a new company, "Interbrew would clearly lose out," argued Marc Leemans an analyst with the KBC bank.

Leemans said AmBev had much more to gain from such a scenario than Interbrew because it is so much smaller than the Belgian giant.

But other experts pointed out that a fusion would give Interbrew access to the hefty South American market, which is growing very fast at present.

"The South American market is one of the few that is growing at the moment. In Europe, beer consumption is falling off and in the US it is stable. If Interbrew wants to grow, it needs to go over there," Christophe Piron, an analyst with the Degroof bank, told Le Soir.

Interbrew and AmBev have not yet said for sure whether they will merge but both firms have released statements saying they were in discussions that could lead to a 'significant transaction".

[Copyright Expatica News 2004]

Subject: Belgian news

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