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Anheuser-Busch agrees to $52 billion InBev buyout

Sunday, July 13, 2008 | 10:37 p.m. CDT; updated 12:13 p.m. CDT, Tuesday, July 22, 2008

ST. LOUIS — Anheuser-Busch agreed to be acquired by Belgian brewer InBev for about $52 billion in a deal that would shift ownership of the nation’s largest brewer overseas, The Wall Street Journal reported Sunday.

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. The newspaper cited anonymous sources who said Anheuser-Busch-InBev would be the new company’s name and Anheuser would have two seats on the board.

Anheuser-Busch Cos. Inc. did not return messages seeking comment Sunday evening.

The newspaper said the deal was for $70 a share, a $5 increase over the offer Anheuser-Busch rejected in June.

InBev, the maker of Stella Artois and Beck’s, 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.

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

InBev has 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 SA 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.

So it was with some surprise when reports surfaced on Friday that the two companies were sitting down for merger talks, reportedly after InBev upped its offer by $5 to $70 per share.

The merger, if completed, will bring to an end one of the most iconic names in American business, and a name synonymous with St. Louis. From college buildings to offices to the stadium where the Cardinals play, 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.

In addition to opposition from politicians and civic leaders, at least two Web sites sprang 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 has not said if layoffs will occur as a result of the merger. But some cutbacks seem likely.

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 — dubbed “Blue Ocean” by the company — was part of a strategy to fend off the merger.

The beer industry has been consolidating in recent years amid rising costs for transportation fuel and key ingredients.


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