Modelo Soars as AB InBev Seeks 100% Stake: Mexico City Mover

Grupo Modelo SAB (GMODELOC), Mexico’s largest beer maker, jumped the most on record as Anheuser-Busch InBev NV seeks to buy the rest of the Mexican brewer.

The shares soared 19 percent to 116.87 pesos at the close in Mexico City, the biggest advance since trading began in February 1994. The stock exchange halted trading for more than an hour starting at 8:44 a.m. to demand Modelo disclose information on what’s causing the market move. The Mexico City- based brewer subsequently confirmed it is in strategic talks with AB InBev (ABI) to expand its current relationship.

AB InBev, as the world’s-largest brewer is known, may spend about $20 billion to buy the rest of Modelo, according to a person with knowledge of the matter. The amount is the enterprise value for the transaction and would include a premium for Modelo as well as a payment to Constellation Brands Inc. (STZ) to buy a stake in a distribution joint venture, said the person, who asked not to be identified because the matter is private. AB InBev owns a 50 percent stake in Modelo.

“The market has been waiting for this for months,” Raul Ochoa, an analyst at Interacciones Casa de Bolsa, said in a telephone interview from Mexico City. “They’ll probably accept the offer.”

The benchmark IPC index of 35 Mexican companies rose 0.2 percent, with only seven stocks advancing as 28 retreated. Modelo has a 3.3 percent weighting on the gauge.

The talks “might or might not” lead to a transaction and “any speculation on the terms and conditions is premature,” Modelo said today in its statement to the bourse.

To contact the reporter on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net