This is not a positive thing for producers.( Not that we can do anything about it)
InBev Raises Its Offer for Anheuser-Busch
From the New York Times
By MICHAEL J. de la MERCED
Published: July 12, 2008
Shares of Anheuser-Busch and the Belgian brewer InBev climbed sharply on Friday as the two began friendly talks to create the world’s largest brewer in a deal for about $50 billion.
Anheuser, the maker of Budweiser and a stalwart of American pop culture, agreed to talk with its unwanted suitor after InBev raised its offer to $70 a share in cash, from $65 a share, people briefed on the matter said. The two companies are expected to hold negotiations over the weekend, and a deal could be announced as soon as Monday, these people said.
On Friday, in a sign of InBev’s confidence, the company began syndicating $45 billion in bank loans that it would need to finance a deal, according to a report by the Reuters Loan Pricing Corporation.
Shares of InBev opened higher on the Brussels Stock Exchange on Friday, closing up 7.4 percent at 44.50 euros. Shares of Anheuser rose 8.6 percent, to $66.50.
The talks could bring a quick end to an increasingly hostile confrontation between the two brewers, one that began with InBev formally offering $46.3 billion last month. The American company quickly spurned the approach, deeming the price too low.
Though InBev consistently said it wanted to strike a friendly deal, it proved willing to go hostile. On Monday it began a campaign to unseat Anheuser’s board. It even recruited an uncle of Anheuser’s chief executive as a nominee for its rival slate of directors.
The American company responded with a lawsuit in federal court, accusing InBev of lying about its financial commitments. Anheuser went so far as to argue that because of the Belgian brewer’s Cuban operations, the combined company would run afoul of American trading prohibitions against the country.
InBev’s persistence was driven by twin desires to capitalize on a weak dollar and to overtake SABMiller of London as the world’s largest brewer by sales volume.
Both SABMiller and InBev, themselves the products of mergers struck this decade, have embarked on a wave of consolidation to gain distribution channels around the world.
Anheuser, which controls about 50 percent of the United States beer market and owns big stakes in top Mexican and Chinese brewers, would be the new crown jewel in InBev’s portfolio, which already includes Stella Artois, Bass and Beck’s.
If a deal is reached, it would be the end of the Busch family’s 148 years of control of Anheuser. The only exception was the time from 2000 to 2006 that Patrick T. Stokes was chief executive; he is now the company’s chairman.
August A. Busch IV, Anheuser’s current chief and a scion of the Busch family, faced increasing pressure to accept an InBev bid. The company’s own cost-cutting efforts, including a promise to cut its work force by 15 percent, drew little support from analysts or investors. It began facing further pressure after several major shareholders, including Warren E. Buffett, were leaning toward supporting InBev’s offer.
W. Randolph Baker, Anheuser’s chief financial officer, said in a statement that the company did not comment on rumors.
Anheuser’s about-face risks raising the hackles of Missouri politicians and customers who rallied to the brewer’s side as it sought to fight off the unwanted advances. InBev sought to head off criticism by promising to keep the combined company’s headquarters in St. Louis and to maintain “the Anheuser-Busch heritage” in the new entity’s name.
That did little to assuage Matthew R. Blunt, the governor of Missouri, who said he was “strongly opposed” to an InBev takeover of Anheuser. Last month, he requested a review of the offer by the Federal Trade Commission.
“I am concerned that this sale would have destabilizing impacts on our nation and state’s long-term economic interests,” Mr. Blunt wrote in a letter to the regulator. “I am opposed to this buyout and am asking you to conduct this review as quickly as possible.”
Anheuser’s political support crossed party lines. Mr. Blunt and Christopher S. Bond, Missouri’s Republican senator, were joined by two of the state’s top Democrats: the state’s other United States senator, Claire McCaskill, and Mayor Francis G. Slay of St. Louis.
Mr. Bond said, “InBev buying Anheuser-Busch is as popular in St. Louis as $4 gas.”
A spokeswoman for Mr. Blunt said he had no comment beyond his previous statements. Representatives for Ms. McCaskill and Mr. Slay did not return calls.
InBev Raises Its Offer for Anheuser-Busch
From the New York Times
By MICHAEL J. de la MERCED
Published: July 12, 2008
Shares of Anheuser-Busch and the Belgian brewer InBev climbed sharply on Friday as the two began friendly talks to create the world’s largest brewer in a deal for about $50 billion.
Anheuser, the maker of Budweiser and a stalwart of American pop culture, agreed to talk with its unwanted suitor after InBev raised its offer to $70 a share in cash, from $65 a share, people briefed on the matter said. The two companies are expected to hold negotiations over the weekend, and a deal could be announced as soon as Monday, these people said.
On Friday, in a sign of InBev’s confidence, the company began syndicating $45 billion in bank loans that it would need to finance a deal, according to a report by the Reuters Loan Pricing Corporation.
Shares of InBev opened higher on the Brussels Stock Exchange on Friday, closing up 7.4 percent at 44.50 euros. Shares of Anheuser rose 8.6 percent, to $66.50.
The talks could bring a quick end to an increasingly hostile confrontation between the two brewers, one that began with InBev formally offering $46.3 billion last month. The American company quickly spurned the approach, deeming the price too low.
Though InBev consistently said it wanted to strike a friendly deal, it proved willing to go hostile. On Monday it began a campaign to unseat Anheuser’s board. It even recruited an uncle of Anheuser’s chief executive as a nominee for its rival slate of directors.
The American company responded with a lawsuit in federal court, accusing InBev of lying about its financial commitments. Anheuser went so far as to argue that because of the Belgian brewer’s Cuban operations, the combined company would run afoul of American trading prohibitions against the country.
InBev’s persistence was driven by twin desires to capitalize on a weak dollar and to overtake SABMiller of London as the world’s largest brewer by sales volume.
Both SABMiller and InBev, themselves the products of mergers struck this decade, have embarked on a wave of consolidation to gain distribution channels around the world.
Anheuser, which controls about 50 percent of the United States beer market and owns big stakes in top Mexican and Chinese brewers, would be the new crown jewel in InBev’s portfolio, which already includes Stella Artois, Bass and Beck’s.
If a deal is reached, it would be the end of the Busch family’s 148 years of control of Anheuser. The only exception was the time from 2000 to 2006 that Patrick T. Stokes was chief executive; he is now the company’s chairman.
August A. Busch IV, Anheuser’s current chief and a scion of the Busch family, faced increasing pressure to accept an InBev bid. The company’s own cost-cutting efforts, including a promise to cut its work force by 15 percent, drew little support from analysts or investors. It began facing further pressure after several major shareholders, including Warren E. Buffett, were leaning toward supporting InBev’s offer.
W. Randolph Baker, Anheuser’s chief financial officer, said in a statement that the company did not comment on rumors.
Anheuser’s about-face risks raising the hackles of Missouri politicians and customers who rallied to the brewer’s side as it sought to fight off the unwanted advances. InBev sought to head off criticism by promising to keep the combined company’s headquarters in St. Louis and to maintain “the Anheuser-Busch heritage” in the new entity’s name.
That did little to assuage Matthew R. Blunt, the governor of Missouri, who said he was “strongly opposed” to an InBev takeover of Anheuser. Last month, he requested a review of the offer by the Federal Trade Commission.
“I am concerned that this sale would have destabilizing impacts on our nation and state’s long-term economic interests,” Mr. Blunt wrote in a letter to the regulator. “I am opposed to this buyout and am asking you to conduct this review as quickly as possible.”
Anheuser’s political support crossed party lines. Mr. Blunt and Christopher S. Bond, Missouri’s Republican senator, were joined by two of the state’s top Democrats: the state’s other United States senator, Claire McCaskill, and Mayor Francis G. Slay of St. Louis.
Mr. Bond said, “InBev buying Anheuser-Busch is as popular in St. Louis as $4 gas.”
A spokeswoman for Mr. Blunt said he had no comment beyond his previous statements. Representatives for Ms. McCaskill and Mr. Slay did not return calls.
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