AB InBev in talks to buy rest of Modelo: source

Belgium-based Anheuser-Busch InBev owns a 50 percent non-controlling stake in Modelo, Mexico's largest brewer, which has a market value of roughly $23 billion.

While the timing of a deal remains unclear, it could come as soon as this week, according to the Wall Street Journal, which reported news of the talks on Sunday.

Representatives of Anheuser-Busch InBev could not be immediately reached for comment outside regular U.S. business hours. Modelo spokeswoman Jennifer Shelley said the company does not comment on rumors or speculation. The source did not want to be identified due to the sensitivity of the issue.

A deal would be the latest in a trend of consolidation in the global brewing industry.

In April, AB InBev's Brazilian unit AmBev agreed to buy a controlling stake in Dominican Republic-based brewer Cerveceria Nacional Dominicana for more than $1.2 billion, forming the biggest beverage company in the Caribbean.

In the same month, Molson Coors Brewing Co said it planned to buy East European brewer StarBev for 2.65 billion euros ($3.5 billion) to expand in developing markets.

Brewing giant SABMiller late last year agreed to buy Australia's Foster's Group for A$9.9 billion ($10.2 billion), while Heineken , the world's third-biggest brewer after AB InBev and SABMiller, expanded in the Americas in 2010 with the acquisition of Mexico's second-biggest brewer FEMSA Cerveza, which also gave it a foothold in the Brazilian market.

AB InBev has extensive operations in North and South America and controls nearly 50 percent of the United States beer market and almost 70 percent of the Brazilian market.

Anheuser-Busch and InBev merged in 2008 to create the world's largest beer maker in a $52 billion deal. That year, Modelo launched an arbitration case against Anheuser-Busch claiming it was not consulted about InBev's acquisition of Anheuser-Busch.

That arbitration potentially cleared the way for AB InBev to increase its Modelo stake, but after losing the case in 2010 Modelo Chief Executive Carlos Fernandez said that controlling shareholders would not sell their stake.

Modelo is tightly family held. Fernandez, who also leads Modelo's board of directors, is from the family that founded the brewer in 1925.

(Reporting by Soyoung Kim in NEW YORK, with additional reporting by Cyntia Barrera and Elinor Comlay in MEXICO CITY; Editing by Dale Hudson and Ian Geoghegan)