Dutch brewer Heineken is in talks to buy the brewing operations of Mexican conglomerate Femsa, according to a report by the Financial Times.
The Amsterdam-based firm is said to be intent on acquiring a foothold in Latin America and especially in MexicoÔÇöthe ninth-largest beer market in the world and the only one in the region not controlled by either Belgian firm Anheuser-Busch InBev or the UKÔÇÖs SABMiller.
Femsa, MexicoÔÇÖs number two brewery, would also give Heineken access to the Brazilian market via ownership of Kaiser, a brewer in which it already holds a 17 per cent stake.
The Latin American beer market is set to increase two per cent between 2008 and 2010, according to figures from beverage research firm Canadean.
Heineken is reportedly keen to reduce its current reliance on sales in Europe, which currently account for 80 percent of its revenue.
The Dutch business has expanded into limited markets outside of the US and Europe thus far, including Nigeria, India and areas within the Asia-Pacific region.
FemsaÔÇÖs brands include Dos Equis, Sol and Tecate, which together account for just under half of MexicoÔÇÖs beer sales.
The brewer also owns the Oxxo network of convenience stores and Coca-Cola Femsa, Latin America's largest soft drinks distributor.
FemsaÔÇÖs beer business alone is said to be valued at around $7.5 billion (Ôé¼5 billion).
SABMiller, which is also said to be in the running to acquire Femsa, is reportedly in a stronger position, as it would be able to buy all of Femsa's businesses, including its stores and Coca-Cola Femsa.
However, Heineken is said to be solely considering the purchase of the beer business, which is heavily reliant on distribution through the Oxxo stores.
If SABMiller were to take over Femsa, it would strike a blow to HeinekenÔÇÖs US business, which distributes FemsaÔÇÖs brands under a deal that runs until 2017.
SABMiller has a market capitalisation of $44 billion (Ôé¼29 billion), compared with HeinekenÔÇÖs $22 billion (Ôé¼14.6 billion).
Rival brewer Anheuser-Busch InBev is said to be looking at expanding its 50 per cent stake in Mexican brewing giant Grupo Modelo.
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