InBev toasts Budweiser deal

The drinks are on InBev today, after it finally persuaded Anheuser-Busch to accept a $52bn takeover bid.

by
Last Updated: 06 Nov 2012

After a long and largely unwelcome pursuit, Belgo-Brazilian brewer InBev (and try saying that after 12 pints of its Stella Artois beer) finally seems to have got its hands on US rival Anheuser-Busch, maker of the famous Budweiser brand. The US company’s board has dropped its opposition to InBev’s bid after it agreed to hike its offer from $65 to $75 per share – meaning a total price tag of about $52bn. Since this is nearly 30% higher than A-B’s record value, we imagine there'll be some happy shareholders getting the beers in tonight…

The combined Anheuser-Busch InBev will become the world’s biggest brewer, making about a quarter of all the beer sold throughout the world: from A-B flagship Budweiser to InBev brands like Stella, Beck’s, Hoegaarden and Skol (it’ll also be a big player in emerging markets, since A-B has a sizeable stake in Mexican favourite Corona and fast-growing Chinese brand Tsingtao). InBev boss Carlos Brito will run the show, while A-B boss August Busch IV will take one of two A-B spots on the 14-strong board.

Although InBev’s offer always looked like a pretty good deal for shareholders (even at $65), the chances of it ever getting a board recommendation looked pretty slim. Only last week, the US company sued InBev, suggesting it had misled shareholders about its financing and was in breach of the US Trading with the Enemy Act (over its Cuban operations). Meanwhile InBev was actively engaged in trying to oust the entire A-B board, provoking a split within the Busch family – while CEO August adopted an ‘over my dead body’ stance from the word go, his uncle Adolphus came out in very vocal support of InBev, even offering to step in to replace his nephew (whatever happened to blood being thicker than water?). But now it seems the irate phone calls August has presumably been receiving from angry shareholders (not least Warren Buffett, who owns a 5% stake) have broken his resolve…

On its website this morning, InBev was highlighting the ‘complementarity’ of the deal (a horrible word if ever we heard one) – boasting that the tie-up would produce cost synergies of about $1.5bn a year. In the US, where there’s already been a political uproar about the prospect of selling such an iconic American brand to some pesky Europeans, this will sound like a polite way of talking about big job losses. But with InBev promising to keep all ten of A-B’s US factories open, its London operation is actually the favourite to get the chop. And we can’t imagine any US politicians campaigning to save our jobs...


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