The Battle is Over: InBev Buys Anheuser-Busch

July 14, 2008
Merger creates the world's largest beer company and top 5 consumer group

Belgian-Brazilian brewer InBev is to swallow Anheuser-Busch in a $52 billion takeover creating the world's biggest brewer, the companies said July 14. After having resisted offers from InBev for a month, the Anheuser-Busch board finally agreed on July 13 to accept a sweetened bid that had been raised to $70 a share in cash from $65.

While capping Anheuser's roughly 150 years of independence as a premier American brewer, the deal creates not only the world's largest beer company but one of the top five consumer goods groups in the world. The new company would have net sales of about $36 billion a year, offering consumers about 300 brands, including Anheuser's Budweiser and Bud Light and InBev's Stella Artois and Beck's.

InBev chief executive Carlos Brito, a tough 48-year-old Brazilian known for cutting costs, is to lead the new company, which will be called Anheuser-Busch InBev.

By merging, the companies said they expect to save 1.5 billion euros annually from 2011 through synergies and that the tie-up will begin adding to earnings from 2010. "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," Brito said.

With a takeover, InBev, which already claims the title of the world's biggest beer maker, would create close to a $100 billion business in the most ambitious act of corporate consolidation since last year's credit crunch shook the markets.

The bid for Anheuser-Busch had stirred fierce opposition in the 150-year-old company's home state of Missouri where Governor Matt Blunt has called the prospect of a foreign takeover "deeply troubling." But many U.S. shareholders in Anheuser, including billionaire investor Warren Buffett, favored the deal.

Brito has sought to win over opponents to the merger by promising to make St. Louis the sprawling company's North American headquarters as well as by vowing not to close any U.S .breweries and lifting the international profile of Budweiser. "With Budweiser as our global flagship brand, that will give us a great platform to develop that brand along with Beck's and Stella Artois," Brito said.

The global beer industry has had a growing thirst for mergers in recent years as brewers struggle to cope with falling consumption in traditionally big markets in developed countries and soaring prices of raw materials. After successive waves of mergers in recent years, Britain-based SABMiller and Dutch group Heineken have emerged as the leading international brewers along with InBev and Anheuser-Busch. InBev was created by the 2004 combination of Belgian group Interbrew and Brazilian brewer Ambev and since then has focused mostly on emerging markets with a growing taste for beer.

Copyright Agence France-Presse, 2008

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