Anheuser-Busch Receives $46B Buyout Bid

Belgian Brewer InBev Delivers Unsolicited Bid For Nation's Biggest Brewery

(AP)  Anheuser-Busch Cos., the nation's biggest brewery, received a $46 billion buyout offer Wednesday from a Belgian brewer that might be too good to refuse.

The maker of Budweiser beer disclosed late Wednesday that InBev SA, whose brands include Beck's and Stella Artois, delivered an unsolicited all-cash bid of $65 a share. It's unclear whether senior Anheuser-Busch executives think the deal makes sense, but shareholders may be drawn to the offer that represents a sizable premium over the company's closing price of $58.35 Wednesday.

If the deal goes through, it would create the world's largest beer company and mark just the latest phase of consolidation in a global brewing industry that is facing rising ingredient costs and stale demand in the United States.

"Anheuser-Busch said that its board of directors will evaluate the proposal carefully and in the context of all relevant factors, including Anheuser-Busch's long-term strategic plan," the company said in a statement. "The board will pursue the course of action that is in the best interests of Anheuser-Busch's stockholders."

A spokeswoman said the company would not comment beyond the statement.

InBev Chief Executive Carlos Brito said the deal would boost both companies, giving InBev access to the U.S. market while expanding Anheuser-Busch's reach overseas.

"We have the highest respect for Anheuser-Busch, its employees and its leadership, who have built the leading brewer in the U.S. and grown the iconic Budweiser brand. Together, we would draw on the collective expertise of both companies' management and employees."

Shares of Anheuser-Busch soared 7.6 percent to $62.80 after hours, when the announcement was made. They had risen 2 percent in late-afternoon trading, when rumors of the deal were reported on CNBC. Speculation has been rife in recent weeks that the deal might occur.

Opposition to a potential takeover has already been fierce in Anheuser-Busch's hometown of St. Louis, and elsewhere in the U.S. The brewer employs 6,000 people in St. Louis, and many workers are worried InBev would cut jobs as the companies consolidate.

Web sites have sprung up opposing the deal on patriotic grounds, arguing that such an iconic U.S. firm shouldn't be handed over to foreign ownership.

"I am strongly opposed to the sale of Anheuser-Busch, and today's offer to purchase the company is deeply troubling to me," Missouri's Republican Gov. Matt Blunt said in a statement.

InBev was formed in 2004 when Belgium's Interbrew merged with South America's biggest brewer AmBev. Since then, the company has cut jobs in several European countries while its sales were boosted by strong demand in Latin American countries.

Worries about job cuts at Anheuser-Busch could be justified. InBev has a reputation for squeezing costs out of the companies it acquires, said Benj Steinman, editor of the Beer Marketer's Insights trade publication. Because of its size - and control of nearly half the U.S. beer market - Anheuser-Busch could be a ripe target for cost-cutting.

"One theory is that their own cost reductions are winding down in Europe and Asia and around the world, and they need somewhere to sort of implement what they're best at," Steinman said.

InBev tried to allay those fears Wednesday, saying it would not close any Anheuser-Busch breweries and would make St. Louis the headquarters for its North American division. The company also said it would invite some Anheuser-Busch directors to join InBev's board.

Anheuser-Busch executives have made cost-cutting a goal over the last two years. Sales in the United States have been stagnant as consumers turn toward wine and cocktails, and the rising costs of ingredients have bitten into profit margins.

Last year, Anheuser-Busch turned a profit of $2.12 billion, up nearly 8 percent from $1.97 billion in 2006. But its core brands of Budweiser and Bud Light continued to lag as sales of craft beers and imports rose.

While the InBev deal looks sweet on paper, it's far from a sure thing. InBev said it plans to pay for the deal with $40 billion in debt, and raising so much capital could be tough as banks tighten their standards during a global credit crunch.

InBev's statement said the company has "strong support" from a number of financial institutions, including Barclays Capital, Deutsche Bank and JPMorgan. The company would pay for part of the deal by divesting some "noncore assets" along with equity financing.

Opposition to the deal is sure to be stiff in St. Louis. A new Web site called SaveAB.com offers visitors yard signs and bumper stickers to express their distaste for the purchase.

"Like baseball, apple pie and ice cold beer (wrapped in a red, white and blue label), Anheuser-Busch is an American original," the site says.

[mrmazerati]

I''v been involved with A-B for many years. Something tells me this deal won''t go through. It''s too shaky on the financing side and there''s no driving reason to merge other than stock price. A-B people seem to need more than that. Similar bids came in the 80''s, when the dollar was cheap, and were also rejected.

[beehive21-2009]

If you folks haven''t noticed ,lots of oil $$$ buying up America,and it is For Sale.Why fight us to control the country,when for a few $$$ ,you can buy it ?

[eatech]

I agree jez123 but the american public has become lazy and they have a dont care attude, until it is to late. If people would stop complaining and start doing something about it the US Dollar would be strong, Gas would be under a dollar, but No they just dont care.

And those that dont care remember that when you are standing in the Bread line.....

[jez123-2009]

Everyone should be alarmed. I don''t want another depression going on, especially one where our businesses have been sold out. Think about it. Our economy is struggling, we have been giving away jobs since Nafta was signed in and now we are selling out our jobs. Our dollar is worth squat and hey those of us who still have a job just might not here quick. This my friends is not a laughing matter but a serious one. You should think long and hard about what may come of all of this before those who make such light hearted comments go about mouthing. We all should be concerned and should stand up and with our voices where they will count. Just another thought the stock market and housing market have been over inflated since the time that Nafta was signed in. I am a proud AMERICAN and I support our president (whoever it is) even if they make questionable decisions (within American reason)but this changing of the tides going on was put into motion prior to this president and with all that is going on it is easy to just point the finger at him. I would like to jump on that band wagon but I have to keep my eyes and mind open and be honest to what is going on, and wonder how it will get fixed especially if we have people who just spew mouthy words and have no true action. We have to think and research before we speak (we don''t want to look foolish), contact our politicians, quit spending money like it is in endless supply to us, and become loyal citizens again.

[jez123-2009]

Everyone should be alarmed. I don''t want another depression going on, especially one where our businesses have been sold out. Think about it. Our economy is struggling, we have been giving away jobs since Nafta was signed in and now we are selling out our jobs. Our dollar is worth squat and hey those of us who still have a job just might not here quick. This my friends is not a laughing matter but a serious one. You should think long and hard about what may come of all of this before those who make such light hearted comments go about mouthing. We all should be concerned and should stand up and with our voices where they will count. Just another thought the stock market and housing market have been over inflated since the time that Nafta was signed in. I am a proud AMERICAN and I support our president (whoever it is) even if they make questionable decisions (within American reason)but this changing of the tides going on was put into motion prior to this president and with all that is going on it is easy to just point the finger at him. I would like to jump on that band wagon but I have to keep my eyes and mind open and be honest to what is going on, and wonder how it will get fixed especially if we have people who just spew mouthy words and have no true action. We have to think and research before we speak (we don''t want to look foolish), contact our politicians, quit spending money like it is in endless supply to us, and become loyal citizens again.

[oscarez]

A Cheap Dollar Boom

"On paper, the Bush administration''s economic policies may seem profligate and potentially ruinous. But there was a consensus among business executives here that the falling dollar has been good for the U.S. economy. The cheaper dollar will stimulate demand for U.S. exports abroad and (in theory at least) reduce America''s demand for imports. That should gradually lower the towering trade deficit."

By David Ignatius
Tuesday, January 27, 2004 at www.washingtonpost.com

Four years later and what do we have!

[oscarez]

This is only one of the first U.S. companies that will be bought by the Euro because of the cheap dollar. Thanks Bush.

[newsjunky5]

With the Dollar so low against the Euro, buying American for Europeans is a bargain, including the company that brews Bud.
The real question here is whether Bud will taste better if the deal goes through, or will Belgian beer get worse?

[tootall10142]

quit drinking bud weiser how hard is that?

[noaanhc]

They may as well just put a for sale sign on the Statue of Liberty for the whole world to know that America is ripe for the pickings.Nothing is sacred anymore in this country that I immigrated so many years ago.America is being sold off piece by piece and now Anheuser-Busch is next.This is just outragous and needs to be stopped by federal intervention.

Also this,I enjoy Budweiser,have done so long before I moved to this country.This is one of the best tasting beers in the world.and the only beer that ever occupied space in my fridge at home.

[dobbershome]

The American buisness man has sold out this country to foreign investers. Why stop now with a Anheuser-Busch?

[shydroanna]

They need to say NO! Stay an American Company mae by Americans. There is nothing in this for John McCain or Obama, but there is a lot as stake for the Americans losing their jobs. They will eventually ship the brewing oversees because it will be cheaper to make the beer and ship it then pay Americans livable wages.

[omnibus66]

2.12 Billion profit return on a 46 Billion investment is a 4.6% return on investment. NOT a good investment. Something smells rotten here.

[gkc99]

Belgians make good beer--a lot better than the tapwater that Bud makes.

But the real question is--what is in this for John McCain?

Will this big money payment to Cindy McCain buy the Europeans something they want from John?

How come our gutless, useless "free press" hasn''t bothered to look into what Cindy McCain wants?

After all, John McCain is bought and paid for by Cindy.

Basically, John McCain is a gigolo for rich **** blondy Cindy.

[crater7]

THE AMERICAN JOBS FLYING OVERSEAS, AND SOUTH OF THE BORDER, IS LIKE S-E-X ALSO:

AMERICANS KEEP GETTING SCREWED OUT OF THEIR JOBS, BY CHEAP FOREIGN LABOR, "FOR CORPORATE GREED."

GOD "BLESS" AMERICA. NOT "G D" AMERICA.

[crater7]

ANOTHER AMERICAN ICON, GOING TO FOREIGN COMPANYS. BY-BY AMERICAN PIE. MORE AMERICAN JOBS WILL LOST AND REPLACED BY CHEAP FOREIGN LABOR.

SO, RAISE YOUR GLASS AND GIVE THREE CHEERS TO ANOTHER AMERICAN TAKE OVER BY FOREIGN COUNTRIES.

GOD "BLESS" AMERICA. NOT "G D" AMERICA.

[floydzeppl]

Yay, perhaps the Belgians can teach us how to brew real beer while they''re at it too.

Posted by bgwinnett at 05:36 AM : Jun 12, 2008
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No kidding.

[bgwinnett]

Yay, perhaps the Belgians can teach us how to brew real beer while they''re at it too.

[floydzeppl]

It''d be cool if they sold it. Then all the bud bumpkins would be buying foreign beer.

[lewiston14]

Sell it. BUD is just a small step up from Coors. They both suck.