InBev has so far received no encouragement whatsoever in its $46bn pursuit of rival brewer Anheuser-Busch, the maker of Budweiser – in fact last week, the US company outlined plans to go it alone. Now InBev appears to be going nuclear: it’s about to launch a bid to sack the entire A-B board, replacing it with a rival faction led by family scion Adolphus Busch IV, uncle of the current CEO. So it sounds like there’s a tasty family spat brewing...
The plans, which will be outlined to US regulators today, indicate that InBev is now willing to go hostile if that’s what it takes to get its wicked way with A-B. The US firm’s constitution apparently allows shareholders to replace all thirteen of its directors at any time, so InBev hopes to take advantage by replacing them with 13 hand-picked substitutes – including some members of the Busch family. Clearly there’s a big divide appearing here: one faction, led by Uncle Adolphus, thinks the offer is a good one; while another, led by nephew August, still considers it small beer for a company in A-B’s position.
InBev insisted that its ‘strong preference’ was still to ‘enter a constructive dialogue’ with the board, but it’s clearly run out of patience with A-B’s attitude. Despite the $46bn offer representing a big premium for shareholders, the US company has so far refused to give InBev the time of day, immediately rejecting the offer as ‘financially inadequate’ and outlining plans to cut $1bn in costs as a bid defence. It’s even got politicians lining up to denounce the deal, horrified by the prospect of selling an iconic US brand to those nasty cheese-eating European types (albeit InBev’s technically half-Brazilian).
InBev clearly hopes that this latest bit of arm-twisting will gather enough shareholder support to force A-B to the negotiating table. It claims the tie-up will create one of the world’s top five consumer companies, strengthening their competitive position and generating savings of about $1bn. And it’s so keen to make the deal happen that it’s willing to explore every possible avenue – even if that means setting family members against each other.
So we’re guessing the atmosphere may have been a bit strained around the Busch family dining table at this weekend’s Fourth of July celebrations...
In today's bulletin:
MT celebrates young women in business
Family battle brewing at Anheuser-Busch
Rose facing thorny reception at M&S AGM
Editor's blog: Graceful collapse of a colossus
Tax: is simple better than stable?