Anheuser-Busch settles for 52 Billion in InBev deal

The rumor is no longer a rumor and almost a done deal.  Personal, when I shared this rumor within the last few months, I thought that it would stay just that — a rumor.  I do not have any personal interest in this deal, but I’ve had a weird feeling in my stomach about this deal.  

As you may or may not know, Inbev is not seen as the guardian angel in this deal — watching over the beer industry, making sure that the consumer’s best interest is their number 1 priority.  As we watch history play out, it is hard not to look at the past.  Just last week, InBev began trying to fire Anheuser’s board. With previous mergers, Inbev took ruthless cost cutting measures and often reduced the workforce along with closing down existing breweries. Some Belgians feel mocked with the sale of Best of Belgium 18 pack in the States (Leffe, Hoegaarden and Stella). Americans are fooled by cool packaging and the strong marketing dollars. Best of Belgium, HA, try saying that to a Trappist Monk.

I will wait to see what happens. I hope that this merger has a positive effect on the craft beer revolution. Buy local. Drink Local. Enjoy Craft Beer!!!

Sean

p.s. If you oppose the merger, visit the following websites to let your voice be heard: SaveBudweiser.com and SaveAB.com.
Notes about the merger:
– $52 billion cash buyout from Belgian brewer InBev.
– Once approved by shareholders, the acquisition of St Louis-based Anheuser-Busch Cos. by InBev will create the world’s largest brewer.
-The combined company is expected to be named Anheuser-Busch InBev.
– Anheuser will be given two seats on the board. The board, which will include Anheuser-Busch President and Chief Executive August Busch IV, will have 14 members, up from 12 currently on the InBev board.
– Anheuser-Busch chief executive August Busch IV, the fifth member of his family to run the 156-year-old firm, pledged just months ago that the company would not be sold on his watch.
– InBev’s offered $70 per share, which is $20 higher than the stock was selling at in early May, before rumors spread of an InBev bid. This is up from their offer in June for $65 per share.
– St. Louis will be the merged company’s North American corporate headquarters.
– InBev was created in 2004 by the merger of AmBev, a Brazilian firm, and Belgium’s Interbrew SA.
– Grupo Modelo, the Mexican brewer of Corona, has both a right to approve a change in control and the right of first refusal to buy back Anheuser-Busch’s 50 percent holding.
– With the combination of Busch and InBev, 357 million barrels of beer will be produced. The merger of SABMiller will be sitting in the distant with no more than 200 million barrels.
– The two companies have about 300 brands, including Anheuser’s Budweiser and Bud Light and InBev’s Stella Artois and Beck’s.
– A-B operates 12 brewing plants around the country and makes its own packaging and labels through its Anheuser-Busch Packaging Group.
– In January, Belgium’s Carlsberg and Dutch Heineken bought the U.K.’s Scottish & Newcastle in a $15.6 billion deal that included Newcastle Brown Ale and 50 smaller brands.
– Eberhard Anheuser acquired the Bavarian brewery in 1860 and renamed it E. Anheuser & Co. His son-in-law, Adolphus Busch, joined the company in 1864 and it was eventually renamed Anheuser-Busch. The company survived Prohibition by selling products ranging from ice cream to root beer.

Here are a bunch of articles written about the merger.

* This Bud’s for who? Belgians (click here)
* InBev to buy Anheuser-Busch for $52B (click here)
* Anheuser-Busch joins global trend with InBev deal (click here)
* Anheuser, InBev Reach A Deal for $52 Billion (click here)
* Outlook: A Glass-Half-Full View of the Budweiser Bid (click here) *** Check this Q/A out, it’s very interesting.

  • Ignace

    Here I was thinking InBev couldn’t do worse than Maes Pils. Obviously, I was wrong.

    The people working for Anheuser-Busch should expect some drastic changes to their culture. When InBev merged with the Brazilian company the culture in the Belgian head office [and other places] most certainly changed.

    I expect to see more commercials in Belgium to sell Budweiser, although to be frank, it doesn’t have a stellar reputation for quality.

    What seems to be more important as a trend here is that the waning economic power of the US opens it up to foreign investments [read: buy-outs]. Budweiser will no longer be American, the Chrysler building is owned by a Dubai company [for at least 75%] and the Dollar is weakening.
    I don’t think this will be the only American icon finding itself in foreign hands.
    Actually, if the Dollar goes even lower than it is now [and chances are that it will be] I might be tempted to make an offer on Harley Davidson. I happen to like Harley Davidson. I cannot possibly be the only one.

    From a profit perspective a bid on Anheuser-Busch makes good sense. I would be more interested in buying a lot of micro breweries. I have had the wonderful pleasure of tasting a wide variety of craft beers in New England. Although it was abundantly clear that many of them are not quite in balance, there are those that have plenty of potential and some of them are exactly where they need to be.
    A craft brewery can’t be all that expensive to buy and the right beer will be a hit anywhere. Not everybody can buy MegaBrew but there is very decent money in a line of beer that has its own character.
    Moortgat for instance, the makers of Duvel, are not interested in selling their brewery [and why should they]. Every brewer who makes a good, honest product will find a market and a good profit. The quality of the product is the decisive factor. Even InBev had to give in and return Hoegaarden to Hoegaarden because the guys at the Jupille plant couldn’t make a reliable brew. It must have been something in the air :).

    The consumer will not notice any change [maybe there will be less commercials at the Super Bowl?], Budweiser will always be the same.
    I hope the taste of the customer does change though as microbrews achieve greater brand recognition. It’s a much better product and it is a great building block of a thriving culture.

    It’s a lot more fun too :).

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