Stella firm buys Budweiser brewer

BBC News ^ | July 14, 2008

[Schnucki]

The US brewer Anheuser-Busch has agreed to be taken over by Belgium-based InBev, in a move that will create the world's largest beer maker.

The $50bn (£25bn) takeover bid by InBev, which makes Stella Artois beer, was accepted by Anheuser's board.

The combined company will now be called Anheuser-Busch InBev.

Anheuser makes Budweiser - the most popular beer in the US - and some US politicians had expressed anger at the prospect of a foreign takeover.

'Unrivalled brands'

In a concession to political concerns about the deal, Budweiser's headquarters will remain in St Louis, Missouri while none of Anheuser's US breweries will be closed.

InBev is offering to pay $70 a share for Anheuser in a deal which must be approved by shareholders of both businesses.

The combined business will have annual sales of $36.4bn, equivalent to 460 million hectoliters of beer a year.

It will bring a host of popular brands including Beck's, Hoegaarden and Staropramen - in addition to Budweiser and Stella - under one roof.

InBev, itself formed by a giant merger several years ago, described the deal as "historic".

"Together, Anheuser-Busch and InBev will be able to accomplish much more than each can on its own," said InBev boss Carlos Brito, who will become chief executive of the new firm.

"This combination will create a stronger, more competitive global company with an unrivalled worldwide brand portfolio and distribution network, with great potential for growth all over the world."

Anheuser boss August Busch said the transaction would "enhance global market access for Budweiser, one of America's truly iconic brands".

Job concerns

There are widespread fears that the deal will lead to substantial job losses in the US Midwest at a time while the threat of recession is hanging over the economy.

The two firms have said the deal will generate annual savings of $1.5bn but have suggested that job losses will be kept to a minimum because there is little current overlap between the two businesses.

Anheuser currently controls nearly half of the US market, while InBev is strong in Western European and Latin American markets. Anheuser also owns stakes in Mexican brewer Grupo Modelo and Chinese brewer Tsingtao.

The deal should give Budweiser a platform to boost its growth in Europe where, apart from a number of markets like the UK, it has been relatively weak.

The beer market has been rapidly consolidating in the face of cost pressures and declining sales in many mature markets.

Scottish & Newcastle, the UK's largest brewer, was recently bought out by Heineken and Carlsberg.

[boogerbear]

I haven’t attempted to badger you into anything. I’ve simply asked WHY. It’s not my fault you can’t come up with a reason why inBev would shut down American production and chose to import all of the AB beverages yet insist that it is not only a possibility but a probability. Maybe if you actually answered the question I’d agree with you. But instead of answering the question you say I’m making assumptions and then say I’m dense. Talk about badgering.

[hunter112]

Should I switch to Sam Adams?

Better still, find your local microbrewer and support him. Adams is OK, but for real flavor, you need to locate someone who knows how to be generous with the use of hops!

Why would they let themselves be bought out by a foreign company?

Maybe it was always about the money? Otherwise, why would A-B and the other biggies continue to make macroswill while the country's taste buds have been getting more sophisticated?

They’re probably going to change the identity of Anheuser-Busch.

Could it sound any more European?

[Partisan Gunslinger]

...and some US politicians had expressed anger at the prospect of a foreign takeover.

US corporate taxes are some of the highest in the world...instead of getting angry, these politicians should eliminate the corporate tax, and we wouldn't lose so many of our businesses to foreigners.

[Nick Danger]

if China were to buy all the property in Nevada, and declare it is a new independent state of China?

Obviously we would have to let them build big Chinese military installations and airlift in a bunch of ICBM's with nuclear warheads aimed at our major cities.

Now you tell one.

[hunter112]

Not far from where I live is a sign which says in German, "beer served in cans is not beer ."

I have to say, I felt the same way until I tried the beers from Oskar Blues.

Cans make sense. They keep out 100% of the light that is an enemy of beer. They're tough to rupture, while a bottle is much more easily broken. And in the days of $4 gas, and nearly $5 diesel, they're a lot cheaper to ship. Since I more than often pour my beer into a shaker glass, I no longer fear the can.

[wastedyears]

Sam Adams uses a pound of hops in their beers.

Other brewers use more?

[hunter112]

...a good light beer...

I've yet to meet one of those.

[DoughtyOne]

I haven’t attempted to badger you into anything.  Three or four, and perhaps even three and four posts back, I stated that in the end you may be proven right, but I was not convinced of it.  Explain to me what more needed to be said at that point.

I’ve simply asked WHY.  I explained to you in detail the why of it.  You chose to deflect my example and state that this time all decisions would be made rationally.  You can't say that for sure, and I pointed that out.  You don't like the answer, but it's an answer.

It’s not my fault you can’t come up with a reason why inBev would shut down American production and chose to import all of the AB beverages yet insist that it is not only a possibility but a probability.  Please point me to the place where I stated any of this would take place.

Maybe if you actually answered the question I’d agree with you.  I did answer you.  You didn't like the answer.  And you dimissed by response to once again state rational decesions were guaranteed to rule the day subsequent to this acquisition.

But instead of answering the question you say I’m making assumptions and then say I’m dense. Talk about badgering.  You are assuming that the points you made are going to be the points and the only points that will be discussed during board decisions made post purchase.  You can't even be sure the points you made will be the points the board wishes to emphasize when their decisions are made in upcoming years.

Later.

[Flying Circus]

If you like Bud, drink Bud. You probably wouldn’t like Samuel Adams anyway.

The situation has to be depressing to the latest Busch scion for losing control of the family company, but he’ll have $70 a share to console him. Some middle managers will probably also feel the sting and St Louis loses claim to another major HQ. Beyond that I don’t think it matters to anyone who owns the company.

[boogerbear]

I ask the question because you won’t answer it. You constantly reply but all your replies are dodging around a simple little question. You can generally tell your position is lacking logic when you start considering “why” to be an unreasonable question.

You never once even came close to attempting to answer that question. Don’t BS and say you did. That’s crap and you know it. Here are your answers:
because that’s what I think
you’re making assumptions
you can’t be rational in a situation like this
you’re dense
you’re badgering

None of those are answers. None of those are attempts to answer. All of those are weak lame dodges used by a person who is realizing but not man enough to admit that his position is emotion based.

Just admit it. You’re a doom and gloomer who assumes everything that happens will be horrible and cost jobs. That’s the real answer to why. You think these this buy out will cost American jobs because you’re just a pessimistic person that think EVERYTHING that happens will cost American jobs. That’s the answer behind your pathetic silly lack of answer.

[hunter112]

Other brewers use more?

There might be a pound of hops in the bottle of Founders Centennial IPA that I'm drinking now!

Seriously, I consider Sam Adams to be entry-level beer for the appreciation of quality beer. Also, I tip my hat to Adams for selling off a very large quantity of surplus hops at cost by lottery to craft brewers who were having an extremely tough time getting them.

As such, I'll quaff a Sam Adams when there are no better alternatives on tap, and sadly, here in Rockland County, NY, there are often no such choices. I was out to my former home in the Pacific Northwest during the 4th of July weekend, and microbrews were everywhere, in the bars, and in the supermarkets. I didn't know how good I had it.

[boogerbear]

The problem with cans is the alcohol content leaches the aluminum. Not enough to be dangerous but enough to give the beer a distinctly tinny flavor.

[DoughtyOne]

Obviously we would have to let them build big Chinese military installations and airlift in a bunch of ICBM's with nuclear warheads aimed at our major cities.  Now you tell one.

Your back-and-forth on this subject makes it sound like you think that someone should stop the people who own A-B stock from selling it. Who is it exactly that should stop Americans from selling their own property if someone offers them a great price?

Oh I think you're doing okay on your own there bud.

I said I had concerns about this type of acquisition.  You made the leap that led to your question.  Don't fault me.

Who says China would want to install these installations in Navada after they made it a Chinese state?  Once again, you are jumping to conclusions.  Don't you believe in free enterprise?  Don't you believe in an owner doing with his property as he sees fit?

[Phantom Lord]

The one problem I have with those who push to not only reduce the trade deficit, but to run a surplus is that they are unable to show that it would actually be a positive. Many countries who run a trade surplus are economic hell holes. Not to mention during the Great Depression, we ran trade surpluses during 9 of the 10 years of the 30s.

If a surplus is panacea or a route to a roaring economy, the 30's would have been boom times. They weren't.

[hunter112]

The problem with cans is the alcohol content leaches the aluminum. Not enough to be dangerous but enough to give the beer a distinctly tinny flavor.

If the beer you drink has so little hops and malt flavor that a few molecules of aluminum can be tasted, then I'd blame that versus the cans. Also, if you drink the beer soon enough after it's made, you really shouldn't have much of a leaching problem. Besides, it can't cost that much to line the cans, Keystone did it, they might still for all I know.

[DoughtyOne]

I ask the question because you won’t answer it. You constantly reply but all your replies are dodging around a simple little question. You can generally tell your position is lacking logic when you start considering “why” to be an unreasonable question.  Covered.

You never once even came close to attempting to answer that question. Don’t BS and say you did. That’s crap and you know it. Here are your answers:  Covered

because that’s what I think
you’re making assumptions
you can’t be rational in a situation like this
you’re dense
you’re badgering

Your clipping skills are second to none.  If you truly think those were my only responses, I'm sure I won't convince you otherwise.

None of those are answers. None of those are attempts to answer. All of those are weak lame dodges used by a person who is realizing but not man enough to admit that his position is emotion based.  Well, you're welcome to that opinion.  I don't mind.  I explained why your pipe dream conclusions are no more proof of anything than my own observations of what corporations tend to do.  You can't make the connection and that's okay with me.

Just admit it. You’re a doom and gloomer who assumes everything that happens will be horrible and cost jobs. That’s the real answer to why. You think these this buy out will cost American jobs because you’re just a pessimistic person that think EVERYTHING that happens will cost American jobs. That’s the answer behind your pathetic silly lack of answer.  Yawn.

Once again, you don't know whether this will cost U.S. jobs or not.  You have placated yourself with some seemingly rational reasons, and I have said that I can't argue with the logic.  I am still aware, which you still at this point don't seem to be, that corportate decisions don't always follow the logic of outside observers.

And so here we are again, you stating that I am bound up by emotions for having admitted amoung other things that over time you may be proven right, and you claiming the moral high ground for claiming you know precisely how this will turn out.

[Phantom Lord]

Well, I hate to be the one to break it to you, but I don't have to explain a thing to you. If you think I'm wrong, so be it. I think you're wrong. I just don't plan on wasting my afternoon telling you the obvious, you don't have any way of knowing what the outcome will be, despite your desparate attempts to prove you do.

Yet in your multiple posts, you claim to know what the outcome will be, but haven't provided any evidence or facts to back up your position.

Will InBev ultimately cut a sizeable number of positions within AB here in America? Maybe so. Maybe not. Only time will tell. But I don't see them spending $52 Billion on AB and engaging in actions to reduce the value of the purchase. Let alone to drastically reduce its value.

And quickly, or even out in the future just a little, to start slashing AB jobs will almost without doubt, cause a beer drinker revolt against them.

[Phantom Lord]

Perhaps a better question would be, what should I say if China were to buy all the property in Nevada, and declare it is a new independent state of China?

Well, such a scenario is 100% bogus. But lets say they tried. They do not have the power of emminent domain, so convincing all residents of Nevada to sell would be a tough task.

But, if they promised to also take Harry Reid and confine him to the borders, I might give it strong consideration.

[Phantom Lord]

Bud, it is logical to assess that rationality is never solid proof of a future decision that is going to be made by a body that is not limited to yourself.

By that reasoning there is no rationality in any decision by anyone, any organization, or any business.

[DoughtyOne]

The one problem I have with those who push to not only reduce the trade deficit, but to run a surplus is that they are unable to show that it would actually be a positive. Many countries who run a trade surplus are economic hell holes. Not to mention during the Great Depression, we ran trade surpluses during 9 of the 10 years of the 30s.  If a surplus is panacea or a route to a roaring economy, the 30's would have been boom times. They weren't.

I believe in a robust trade.  I don't believe in trading with nations that charge 40% on our exports as they enter their nation, running espionage that steals our nations greatest secrets, and uses those secrets and profits realized from our trade, to implement a policy of building to become a world class pariah state.  And yes, gifting nations with know how that we came by over a century, does gripe me.  It also gripes to me to see multi-nation agreements that bind us in ways that are unhealthy, when we are free to make healthy personal agreements with any single nation we choose, any day we like.

Your points about the depression are reasonable.  I would still point out that we had a pretty damned good nation with trade deficits that were lower than 100 million per year.  I don't see much of an improvement in product quality.  I don't see an improvement in some nation's global aspirations.  I don't see an improvement in our R&D and deveolopment.  And as for those unemployed workers during the depression, what good would it have done to put more people out of work, or see downward pressure one the people's wages who were working during that type of a cataclysmic event?

I see balanced trace as healthy.  It wouldn't be my first choice, but I could live with 100 million or less trade deficits.  I'd like to see the dollar back where it belongs.  I don't see the benefit of destroying it's value to increase trade, then turning around and paying more for imports because it's weak.

Look, that's my take on it, for what it's worth.