* Modelo deal unlikely to satisfy AB InBev's desire for more
* Big deal targets starting to dry up for global brewers
* Castel, Petropolis might come up for sale
By David Jones
LONDON, June 29 (Reuters) - Big brewing deals are still very much on the agenda, even after Anheuser-Busch InBev buys out Mexican brewer Grupo Modelo for $20.1 billion.
The world's largest brewer may well be back on the acquisition trail in a couple of years, bankers and analysts say, with its biggest rival SABMiller likely in its sights. Meanwhile some family owners of the few remaining bid targets may be tempted to cash in their scarcity value with other buyers.
The world's four biggest brewers AB InBev, SABMiller, Heineken and Carlsberg already control half the global beer market. AB InBev is controlled by Belgian founding families and big Brazilian investors, while Heineken is family controlled and Carlsberg half-owned by a charity.
Analysts say Heineken and Carlsberg, the smaller of the four, are determined to stay independent so are unlikely to get involved in big industry consolidation.
The scarcity of available brewing assets which forced AB InBev to pay a high price for Modelo, may now also raise the value of others that could come up for sale such as family owned Africa's Castel and Brazil's Petropolis.
Analysts calculate that AB InBev, which makes Budweiser and Beck's, paid around 15.4 times core EBITDA profits for Modelo in a deal agreed on Friday, higher than the 11.5 times Heineken paid for Mexico's second-biggest brewer FEMSA Cerveza in 2010 as remaining deals get more pricey
"As the global beer market consolidates, and family shareholders controlling the last remaining attractive assets are less willing to sell, multiples will likely be driven up," said analyst Melissa Earlam at broker UBS.
Analysts say it is difficult to gauge when or if Castel and Petropolis, which brews Itaipava, come onto the market, and doubt whether family owned Spanish groups like Mahou and Damm are likely to be sold, even though they are based in a crisis-hit domestic economy.
SABMiller has a cross-shareholding with Castel and has said it would be keen to buy its African brewing operations in a deal worth around $10 billion that would give the combined group nearly 60 percent of the fast-growing market. Analysts say there is no indication that Castel may be up for sale.
Petropolis is Brazil's second-largest brewer with a 11 percent market share trailing AB InBev's 70 percent, and after Kirin bought No 3 player Schincariol many analysts see Heineken, which owns No 4 brewer Kaiser, as the favourite for a possible $3.4 billion deal if Petropolis becomes available.
AB InBev could be attracted by SABMiller's open share register and generally good geographic fit as it seeks global beer growth spots, even if a $80 billion possible price tag seems a little heady, analysts say.
AB InBev's strength in America would be complemented by SABMiller's big presence in Africa, eastern Europe and Australia.
Analysts estimate African beer volumes rose around 7 percent in 2011, but stripping out the mature South African market, which accounts for over a quarter of the continent's beer, then growth was well over 10 percent.
"The strategic logic behind this mega deal is unchanged, the geographic overlap is limited and the savings on costs and procurement are big. A Modelo deal only delays a move," said one investment banker with knowledge of the brewing sector.
AB InBev says it expects to be below its targeted net debt to EBITDA core profit ratio of 2 times during 2014. Before the Modelo deal, it had seen this ratio down at 2 times this year after being at 2.26 times at the end of 2011.
The brewer took on hefty debts with its acquisition in 2008 of Anheuser-Busch but asset sales, cost savings and strong free cash flow brought this down quickly.
Although analysts say AB InBev paid a high price of $20.1 billion for the half share in Modelo it did not already own, the brewer also unveiled higher than expected annual cost savings of at least $600 million.
A potential AB InBev-SABMiller tie up would need disposals in the U.S. and China to get around anti-trust issues, but analysts believe this would be worth it to win possible annual cost savings which could top $1 billion.