Diageo is seeking growth in markets outside Europe, as part of its plan to get half of its net sales from developing markets by 2015. The distiller is keen to make acquisitions in the Asia-Pacific region, Gilbert Ghostine, president for the region, said in an Oct. 1 interview. The company gets about 14 percent of revenue from Asia-Pacific and is “on-track” to raise revenue from emerging markets to 50 percent from 40 percent, he said then.

United Spirits had a 43 percent share of India's whiskey market in 2011, followed by Pernod Ricard SA with 15 percent, according to Euromonitor data. Diageo had only 0.1 percent of the market, it showed.

Eoin Treacy's view I heard a statistic quoted recently that the major brewers such as Diageo, InBev, SAB Miller etc. account for no more than 25% of global volumes. Since the drinks industry represents one of the sectors most likely to benefit from the growth of the global middle class, there is significant potential for additional growth through acquisitions.

Rather than start from scratch, companies have pursued the acquisition route to growth over the last couple of years. Heineken moved to buy the portion of Asia Pacific Breweries that it did not already own earlier this year; exhibiting a more committed approach to expansion in Asia. InBev Anheuser Busch announced in June that it would acquire the rest of Mexico's Grupo Modelo. Diageo now plans to purchase 51% of United Spirits in its bid for the company. Will the pace of takeovers persist? I believe it will.

I performed a search on Bloomberg this morning for companies in the brewing and distilleries sector in Eastern Europe, Asia, Latin America and Africa with a market cap in excess of US$500 million. I then excluded those with negative earnings. The resulting list of 55 shares represents a potential pool from which major breweries might select acquisition targets.

Philippines listed San Miguel or Thailand's Singapore listed Thai Beverage are obvious candidates if their owners can be encouraged to sell. Hong Kong listed Kingway Brewery drew my attention. Although it is a subsidiary of the Guangdong government it could become a target of one of the large mainland breweries. The share has held a progression of higher reaction lows since 2009 and a sustained move below HK$2.50 would be required to question medium-term scope for continued upside.