Susquehanna (SIG), a Wall Street investment advisory firm has said that PepsiCo could be Anheuser-Busch InBev (AB InBev) next acquisition.

AB InBev recently merged with SABMiller and the transaction is expected to close on Oct 10.

“Conventional wisdom, rightly or wrongly, has it that after digesting SABMiller, AB InBev will make a move for Coca-Cola as it expands beyond beer,” Susquehanna said.

However, the firm added that PepsiCo would be a better choice to buy.

AB InBev can absorb half of PepsiCo but not all of Coca-Cola, the firm noted.

PepsiCo’s beverage business is 75% owned by PepsiCo, whereas Coca-Cola US operations (bottling and distribution) will be owned by independent bottlers come end of 2017, after the on-going refranchising programme is complete.

Moreover, AB InBev already bottles for PepsiCo in much of Latin America through its Brazilian subsidiary, AmBev.

Additionally, if AB InBev were to acquire PepsiCo’s beverage unit and leave its food division to Kraft Heinz, it would result in a “much more attractive deal,” SIG said.

“We think a bid for PepsiCo would make more sense from a valuation perspective at least,” the firm said.

SIG adds that PepsiCo bottlers in foreign markets such as Mexico, China, India and Canada could be acquisition targets if relevant “scale-up benefits” were shown.