A Sad Day For America

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ST. LOUIS - Anheuser-Busch, the maker of Budweiser and Bud Light, has agreed to a takeover by a giant Belgian brewer, a union that creates a global beer leader and brings to an end one of the most iconic names in American business.

The board of directors of Anheuser-Busch Cos. Inc. on Sunday accepted a sweetened $52 billion takeover offer from Belgian brewer InBev SA, according to a joint press release.

The deal, which is subject to shareholders' and regulators' approval, would create the world's largest brewer and create the fourth-largest consumer product company worldwide.

"This combination will create a stronger, more competitive global company with an unrivaled worldwide brand portfolio and distribution network, with great potential for growth all over the world," Carlos Brito, CEO of InBev, said in the statement.

For InBev, the maker of Stella Artois and Beck's, the deal gives an aggressive company an iconic beer brand — Budweiser — to sell into emerging markets where it has already established a firm footprint.

InBev is the world's second-largest beer-maker behind SABMiller. Anheuser-Busch is by far the largest brewer in the U.S. with more than 48 percent of the market share.

Brito will be chief executive officer of the combined company, which will be named Anheuser-Busch-InBev. Shareholders will receive $70 a share, a $5 increase over the offer Anheuser-Busch rejected in June.

It wasn't immediately clear how long approval might take. Several Missouri politicians have expressed concerns about the merger — especially how it would affect the approximate 6,000 people employed by Anheuser-Busch in St. Louis.

InBev said it plans to use St. Louis as its North American headquarters, and that it will keep open all 12 of Anheuser-Busch's North American breweries.

InBev announced its intent to try and purchase Anheuser-Busch on June 11. The Anheuser-Busch board initially voted against the merger, calling the initial $65 per share offer too low.

That prompted much squabbling between the companies over the past few weeks. InBev filed a motion seeking the removal of all 13 Anheuser-Busch board members; Anheuser-Busch filed suit calling the InBev effort an "illegal scheme" that threatened to defraud Anheuser-Busch shareholders. Among other things, the suit noted that InBev failed to disclose it operates a brewery in Cuba.

Few products are associated with America as much as Budweiser. Its Clydesdale horses are fixtures of Super Bowl ads, and even the label is red, white and blue, with an eagle swooping through the "A."

"This agreement provides additional and certain value for Anheuser-Busch shareholders, while enhancing global market access for Budweiser, one of America's true iconic brands," August Busch IV, Anheuser-Busch president and CEO, said in the statement.

The merger, if completed, also will bring to an end a name synonymous with St. Louis. From college buildings to theme parks to offices to the stadium where the Cardinals play baseball, the Busch name is virtually everywhere in the Gateway City.

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.

Fears that InBev would make layoffs prompted some U.S. politicians and civic leaders speak out against the deal. At least two Web sites also sprung up opposing the merger. SaveBudweiser.com claims to have more than 60,000 signatures from merger opponents. SaveAB.com hosted a recent anti-merger rally that drew hundreds to downtown St. Louis.

InBev is renowned for shaving costs since it was formed in a 2004 merger between Belgium's Interbrew and Brazil-based AmBev. The company has not said if it will shed Anheuser-Busch staff to make savings. But some cutbacks seem likely.

The company said it expects cost synergies of at least $1.5 billion a year by 2011 over three years. The deal won't benefit earnings per share until 2010, it said.

Even without the merger, Anheuser-Busch said last month it planned to cut pension and health benefits for salaried employees as part of an effort to slash $1 billion in costs by the end of 2010. The plan called for offering early retirement to 1,300 salaried workers 55 and older.

The cost-cutting effort was part of a strategy to fend off the merger. Anheuser-Busch also owns a 50 percent share in Grupo Modelo, Mexico's leading brewer, and a 27 percent share in China brewer Tsingtao.

The beer industry has been consolidating in recent years amid rising costs for transportation fuel, aluminum for beer cans and key ingredients such as hops.

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“Believe in yourself. Believe in your own potential for greatness. Believe that you can change the world. It is something that is within each of us.”
– Evan Michael Tanner 1971-2008

MMA Playground Honors:
MMA News Reporter
2007 News Mogul Of The Year
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Top Earner: EXC Kimbo Vs. Tank-7th Place
Top Earner: Secondary League Season 2-10th Place
Top Poster Badge Earned 4/30/08

Last edited 7/14/08 1:52PM by Rush
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2 total post edits

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Posted by Rush

No big loss. I don't even consider Bud as beer.

Molson Canadian was taken over by Coors, which is an American company and another Canadian brewery, Sleeman, was taken over by Sapporo Breweries (Japan).

Personally, both of those beers sucked so I didn't lose sleep over it. The economy is cyclical and as long as it is not taking jobs away from Canadians (in your case Americans) I wouldn't worry about it.

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Last edited 7/14/08 1:52PM by Rush
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Posted by bullettdodger

Yeah as was said, i think that Bud being made by Belgians is fine, hell... they're probably going to make a better tasting product. I might actually buy Bud again, but only if they change the formula. Its understandable to have nostalgia for the old regime, but i bet the new owners will make a better product... or the same product, can't really go wrong there.

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Posted by Rush

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Posted by bullettdodger

Yeah as was said, i think that Bud being made by Belgians is fine, hell... they're probably going to make a better tasting product. I might actually buy Bud again, but only if they change the formula. Its understandable to have nostalgia for the old regime, but i bet the new owners will make a better product... or the same product, can't really go wrong there.

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The way I look at it is the Bud produced in the US will still be the same. I don't think the new owners will change the recipe.

Really I see Bud spreading out more in Europe now. The European brand might taste different, but I think pretty much everything in the US will be left the same. That's the way it was with the Molson takeover up here. The only difference is you can buy Molson Canadian and Coors Light in the same 24 box now (i.e. 12 of each)

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Rest In Peace Evan Tanner...
I hope you found what you were looking for out there...

Bas "El Guapo" Rutten: "Godspeed and Party On"

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Posted by bullettdodger



Also to the guy who said "sorry America, your beer sucks" all the major brands are pretty bad, but your statement is inherently wrong in that we have a large amount of "microbrews" that are quite good and i would match them up against any beer in terms of flavor. Fat Tire is a good tasting but fairly weak beer that we get down here. So come on down, and try and find the good beer. It may be harder to find and not marketed as much as bud, coors, or miller, but its infinitely better and well worth the effort... if you like beer that is

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Last edited 7/14/08 2:53PM by CantAndleDaRiddum
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