Analyst jazzes up sale of Grupo Modelo to AB-InBev …

“We believe that a deal is likely to be announced this year,” Evolution Securities’ analyst Andrew Holland reportedly said in a research note in early March.

Perhaps analysts possess powers of clairvoyance lesser mortals do not. For the time being, however, whatever they see when they stare into their crystal ball cannot be anything but a figment of their imagination. There are no hard facts to claim that a deal is imminent – only rumours and speculation.

Granted, Heineken’s USD 7.7 billion (EUR 5.7 billion) deal to buy the beer operations of Mexico’s FEMSA Cerveza, the maker of the Dos Equis and Tecate brands, in January this year has prompted many beer industry observers to wonder if that could push Grupo Modelo further into AB-InBev’s arms.

The strengthened competition from FEMSA and Heineken could finally convince Grupo Modelo’s shareholders, so their reasoning went, to drop their resistance to a complete sell-out to AB-InBev.

AB-InBev gained a 50.2 percent economic stake (but no control) of Grupo Modelo when InBev bought St. Louis-based Anheuser-Busch in late 2008.

Relations between AB-InBev and Grupo Modelo have been strained since Grupo Modelo filed for arbitration and USD 2.5 billion in compensation, claiming Anheuser-Busch failed to consult with it about the takeover.

In view of the fact that the arbitration has lasted longer than expected, many market observers think that the two sides may actually be discussing a full acquisition.

Assuming a takeover enterprise value/earnings before interest, tax, depreciation and amortisation multiple of 11.6, the same as the Heineken-FEMSA deal, 50 percent of Grupo Modelo could be valued at USD 10.8 billion, Mr Holland said in his note.

Unfortunately, a reasonable suspicion coupled with some circumstantial evidence still comes down to pure speculation – and not a fact.

It seems like we will have to wait until there is a public announcement.