This Bud’s for InBev
Anheuser-Busch, after mounting fierce defense, agrees to sale to Belgian brewer for $52 billion.
July 14, 2008
Anheuser-Busch and InBev agreed early Monday to a merger agreement under which the American beer conglomerate would fall under control of the Belgian brewer for about $52 billion, or $70 per share.
Together, the companies would have joint annual sales of $36 billion, pushing the conglomerate past SABMiller for world’s largest distribution.
InBev’s first pass included a bid just over $46 billion, which was met with vehement opposition from Anheuser-Busch directors as well as politicians who spoke out against the merger. InBev went as far as to seek a new slate of directors for Anheuser-Busch and the American beer maker initially sought to resist any deal.
As some Anheuser-Busch shareholders reportedly warmed to the idea of the deal, the American beer producer revisited the idea of a deal and asked for InBev’s best offer—which resulted in a 7.7% offer per share increase.
At a time when larger deals have stagnated due to an unavailability of debt, InBev secured about $45 billion in debt to complete the deal. Now, with Anheuser-Busch’s revenues stagnating in recent years and increasing prices for ingredients, InBev will be challenged to ensure the two companies and their array of brands can be capitalized upon while maintaining minimal overlaps during the integration period.
“Together, Anheuser-Busch and InBev will be able to accomplish much more than each can on its own,” said InBev chief executive Carlos Brito. “The 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.”
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