Mexico: Shares of Mexican bottler and brewer Femsa surged almost 10 % to a record high of 54 pesos on March 1, after Belgium's Interbrew, the world's fourth-largest brewer, which owns 30 % of Femsa, said it was in discussions with fifth-ranking AmBev, of Brazil.

The Mexican brewery's American Depositary Receipts jumped as high as $49.38 on the New York Stock Exchange. The stock benefited from speculation that Interbrew and AmBev might merge to create the world's biggest brewer, worth some $23 billion, traders said. Femsa, wich brews Sol, Tecate and Dos Equis beers, could benefit directly from the negotiations as Interbrew has a 30 % stake in the Mexican brewery, they noted.

Interbrew, which makes Stella Artois, Beck's and Labatt Blue, has been unable to agree to a joint distribution deal with Femsa in the key U.S. market.

Mexico's top brewer Modelo, which makes the popular Corona brand, gained 1.65 percent to 30.10 pesos on the Mexican stock exchange. "Beer companies are being revalued." said Edgar Amador, a stock market analyst.

02 March, 2004