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Shares in Mexican brewers rallied for a second day Friday after No. 2 beer maker Femsa (FMX) said it was in talks with several companies to explore opportunities involving its beer business.

Femsa UBD shares were up 4.9% at 60.65 ($4.45) at 2:28 p.m. EDT after soaring 12% the previous session.

The C shares of rival Grupo Modelo SAB (GMODELO.MX) were 7.8% higher at MXN57.97 on speculation that Modelo, Mexico's largest brewer, could be a takeover target. Brewing giant Anheuser-Busch InBev (BUD) holds a non-controlling 50% stake in Grupo Modelo.

In a filing with the local bourse late Thursday, Femsa said "there can be no assurance that such discussions will lead to any definitive agreement."

The filing came after The Wall Street Journal reported the Monterrey-based company is in discussions to merge its beer operations with a larger rival in an operation that could be worth as much as $9 billion.

The WSJ said Femsa has held talks with SABMiller PLC (SBMRY) and Heineken NV (HINKY), citing people familiar with the matter.

Femsa's talks come at a time of consolidation in the global beer industry as brewers seek economies of scale and access to new markets through mergers and acquisitions.

Mexico's beer market is a cozy duopoly of Corona maker Modelo and Femsa, which accounts for around 40% of domestic sales with brands like Sol, Tecate and Dos Equis.

Femsa's brewing unit, Femsa Cerveza, has been overshadowed for years by its soft drinks division Coca-Cola Femsa (KOF), the largest Coca-Cola bottler in Latin America.

Femsa Cerveza accounted for 24.6% of Femsa's total sales of MXN168 billion last year, and 23.8% of operating income. It sold 41.1 million hectoliters of beer in 2008, with Mexico accounting for about 67% of sales volume, Brazil 25%, and exports nearly 9%.

Heineken owns 17% of Femsa's Brazilian unit, and is the exclusive importer, marketer and distributor of Femsa brands in the U.S. through the end of 2017. Femsa also has a network of more than 6,800 convenience stores that only sell Femsa beer brands.

UBS analyst Tomas Lajous said in a morning note to clients that Femsa Cerveza is worth no more than $7.5 billion.

"Much more than that would place a lot of risk on a deal actually being reached, in our view. The other risk is potential further taxation on beer and profits in Mexico, which could make a buyer falter," he wrote.

Mexico's government wants to raise the income tax rate and hike excise taxes on items like beer under its 2010 budget proposal before Congress.

In contrast to Femsa's regional ambitions, closely held Modelo has eschewed international expansion and instead focused on maintaining its leadership in Mexico's beer market.

Modelo has been the subject of takeover talk since Belgian-Brazilian brewer InBev bought out U.S. icon Anheuser-Busch Cos in a $52 billion deal last year, which included the U.S. firm's 50% stake in Modelo.

Modelo started arbitration procedures in October 2008, saying the merger of Anheuser-Busch with Inbev violates the provisions of the investment agreement between the U.S. brewer and Modelo.

Modelo said in a stock market filing Friday morning that movements in its share price were due to "market conditions."

Modelo executives were not immediately available for comment when contacted by Dow Jones Newswires.

"We retain the view that over the mid-term, Anheuser-Busch Inbev will absorb Modelo. ABI has expressed interest in the asset, and it is the next logical move within the secular consolidation of the brewing world. We think it makes sense for Modelo too, just maybe not now," Lajous said.

-By Ken Parks, Dow Jones Newswires, 52-55-5001-5723, ken.parks@dowjones.com