* SABMiller buys into Argentine beer market
* Buys CASA Isenbeck, with 3 pct market share
* Plans to supply Paraguay, South Brazil, Uruguay
(Rewrites with further details)
By David Jones
LONDON, Nov 24 Brewer SABMiller Plc (SAB.L) agreed to buy Argentine brewer CASA Isenbeck, taking a step into a market dominated by the world's biggest brewer Anheuser-Busch InBev (ABI.BR) with its 74 percent share.
Analysts estimate the world's second biggest brewer SABMiller is paying $43 million to buy the business from German brewer Warsteiner, giving it the number three position with a 3 percent market share behind AB InBev and Heineken/CCU (HEIN.AS) with 22 percent.
CASA Isenbeck brews Isenbeck and Warsteiner beers with sales of around 600,000 hectolitres in 2009. Its one brewery at Zarate, near Buenos Aires, has a capacity of 1.2 million hectolitres. Warsteiner will be brewed under licence in a long-term agreement with the German brewer.
The London-based brewer intends to supply Paraguay, South Brazil and Uruguay with beer from the Argentine brewery and then later intends to brew its Peroni brand to appeal to Argentinia's large Italian-speaking population. It also plans to supply the 100,000 hectolitres of Miller Genuine Draft sold in Paraguay from its new Argentine brewery.
AB InBev dominates the Argentine market with local brands such as Andes and Quilmes Bock, but it also sells Stella Artois and Brahma beers to Argentina's population of 40 million in a country with a per capita beer consumption of around 41 litres compared with 81 in the United States and 57 in Brazil.
Although the deal is small in financial terms, analysts say it is SABMiller's first significant move in Latin America since 2005 when it acquired Bavaria to gave it major operations in Colombia, Peru, Ecuador and Panama.
"Its foray into an ABI-dominated territory shows the confidence SAB has in its Latin American division and will undoubtedly prompt speculation that an incursion into Brazil may be next on its hit list," said analyst Simon Hales at brokerage Evolution Securities.
AB InBev has around a two-thirds share of the Brazilian beer market, the world's third largest, and Brazil is a major profit contributor for the Belgium-based brewer.
SABMiller, which earlier this month beat forecasts with a 16 percent rise in half-year earnings due largely to a strong recovery in emerging markets, gave no price for the purchase, only saying its target had gross assets of $24.7 million. [ID:nLDE6AG1CF]
SABMiller shares were up 1.7 percent at 20.94 pounds by 1030 GMT. (Editing by David Holmes)