"We believe that a deal is likely to be announced this year," analyst Andrew Holland said in a note Tuesday. "We believe that a Modelo acquisition would provide a catalyst for outperformance."Modelo controls 63 percent of the Mexican beer market and has exclusive rights to import and distribute A-B products in that country.
Heineken's $7.7 billion deal to buy the beer operations of Femsa, the maker of Dos Equis, has prompted many beer industry observers to speculate over whether that would push Modelo further into A-B InBev's arms. The strengthened competition from Femsa and Heineken could finally convince Modelo shareholders to drop their resistance to what many analysts expect will become inevitable -- a complete sellout to A-B InBev.
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