InBev finally takes Budweiser
26 August 2008
After an embittered battle between Belgian InBev and the US’ largest brewer, Anheuser-Busch, the two finally managed to avoid court and strike an amicable deal. Following the standoff which incurred legal action on either side, the Belgian giant in the end agreed to raise its bid from $46.3 billion to $52 billion, securing a peaceful takeover.
A-B, whose portfolio includes flagship brand Budweiser, 50% of Mexican Grupo Modelo, and 27% of China’s Tsingtao Brewery, had filed a suit against InBev, alleging that the company had made “false and misleading statements” about its $65 a share offer. The Budweiser manufacturer took exception to claims that its suitor had “fully committed finance”, saying that it did not believe this was the case.
InBev responded by threatening the A-B board with court action if negotiations between the two companies disintegrated, and later filed a Consent Solicitation Statement with the United States Securities and Exchange Commission to remove each member of the company’s board.
During the fight for Anheuser-Busch, the US brewer’s share price rose 37 cents to $66.87 a share in New York, while simultaneously InBev stock dropped 3.4% in Brussels. Being such an iconic American brand, its attempted hostile takeover by the Belgian beer-maker was met with considerable political opposition, including from Senator Barack Obama.
In what was subsequently deemed to be a wise move, InBev raised its bid for A-B to $70 a share, enabling it finally to acquire the brewer and its 48.5% share of the US beer market.
The newly formed Anheuser-Busch InBev is the third largest consumer products company in the world after Procter & Gamble and Nestlé, according to InBev chief executive Carlos Brito. Plans are already underway to expand the company’s star brand Budweiser around the world, says Brito, who believes it has the same overseas potential as global brands McDonalds and Pepsi-Cola.
Budweiser has traditionally had difficulty in Europe where a Czech brewer holds the brand name, resulting in long, painful legal battles. InBev says it will be able to start off trading the beer under the full Budweiser name in 16 out of 35 European countries, using Bud or Anheuser-Busch Bud elsewhere. If the Belgian’s ambitions are realised, it would see Anheuser-Busch InBev hold unrivalled distribution channels in the world’s five largest beer markets, China, the US, Russia, Brazil and Germany.