Bigger is not Better

Heineken said today that it plans to buy the beer operations of Femsa, the maker of Dos Equis, further consolidating the global brewing industry.

The deal cements Heineken’s position as the world’s second-largest brewer by sales after Anheuser-Busch InBev of Belgium. In Mexico, Femsa is the second-largest brewer behind Grupo Modelo, the maker of Corona Extra, the top import brand in the United States.

A-B InBev owns half of Grupo Modelo and wants to buy the rest. 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.

Will ABInbev someday own Heineken? Probably.