It must have been a deeply emotional board meeting for Anheuser-Busch Cos. (NYSE: BUD). In family control for more than 150 years, the company has become a quintessential American icon.Despite all this, Anheuser's had no choice in selling out to InBev NV, a giant beer company based in Leuven, Belgium.
Simply put, the offer was too rich: $49.91 billion. After all, over the past few years, Anheuser was a laggard. What's more, the plunging dollar has made it easier for foreign-based buyers to make plays for U.S. companies. It seems that no company is immune.
The Anheuser-InBev merger combination -- which will be called Anheuser-Busch InBev -- will result in the world's largest beer company (the #2 will be SABMiller PLC). In all, revenues will amount to roughly $36 billion.
For InBev the deal carries lots of risk. The valuation for Anheuser comes close to 15X EBITDA (earnings before interest, taxes, depreciation and amortization). Furthermore, the deal involves a huge slug of debt. Then again, over the years, InBev has demonstrated savvy M&A skills, wielding a strong cost-cutting knife.
In the end, it's the shareholders who are cheering, with Warren Buffett being particularly joyful. His company, Berkshire Hathaway (NYSE: BRK.A), owns 5% of Anheuser.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements
. He also operates MergerBook.com.











Reader Comments (Page 1 of 1)
7-14-2008 @ 8:03AM
zbadblonde said...
NO MORE BUDWEISER FOR ME !!!! I sure hope everybody that drinks bud like me takes the same stance. Budweiser may be for sale but I'm not. Lets stand together and wake these people up.
7-14-2008 @ 9:50AM
Thomas said...
I can gladly say, I will never buy a Bud again. Warren Buffet is the devil.
7-14-2008 @ 8:16AM
Robert said...
I FULLY agree that it is a sad day for yet another large American company, and an American icon at that, that has been taken over by an overseas Corporation.
Although I am sure the Anheuser-Busch family would loved to keep the company strictly American, they have absolutely no choice in the decision since they only own a 4% marketshare in the company.
Without a controlling 51% in the company, they can do nothing to stop the merger if stockholders vote it in.
I myself will also no longer buy Anheuser-Busch products.
7-14-2008 @ 8:47AM
Chuck said...
America is officially up for sale... What a sad day this is and more than likely very little will be made of it. However, people should take notice that an American Icon just went to the highest bidder. Not to mention the loss of American jobs in a time when the economy is pushing people to their limits. We're going to come out of this mess one day only to find that Americans no longer own America and our industry is in the hands of foreign investment. I would hope people see that by remaining an Anheuser customer, you have essentially rewarded those who are driven by greed. Anywho, that’s my take on it.
7-14-2008 @ 9:00AM
BillM said...
zbadblonde and Thomas have it exactly right. . . no more Bud for me either.
There are plenty of wholly American brews that are as good as or, in many cases, much better than Bud.
As for me, I'll be drinking microbrews exclusively where they're available and otherwise Sam Adams.
Better to support small US brewers rather than add my dollars to the trade deficit.
7-14-2008 @ 9:28AM
Jim said...
I am torn as to whether buy AB products or not. If I do boycott I will be making a statement to InBev but if enough people do this boycott the ultimate loosers will be the plant workers. Do they deserve this? Tough decision.
7-14-2008 @ 10:09AM
BillM said...
Jim,
Rest assured, if you and others boycott InBev and AB workers lose their jobs as a consequence, they can always seek equivalent employment at the microbreweries that are picking up AB's slack, as the MB's are present in virtually every community in the US.
7-14-2008 @ 12:27PM
J White said...
America has NEvER owned anything nor will it.... Coming from a rather un-educated 26yr old white male...
America is run off credit, a way to give equality to people... All credit companies (Credit card companies, investment lenders, most banks...) all owned by over-sea's investors!
This is not much of a sad day for America but a day for all stock holders to realize a profit! It's time we all cut our costs and lived like the Chinese!?! NEVER! Remember.. if a product is cheap it may help your pocket today; while next week when your waiting on your social security check and it's smaller than ever ... maybe I should have bought something that say's "Made in the USA"!
To all production companies hold your head high if your product says that: because the global stance America has had is ending and all those global "Aid" packages we've sent to other countries... well don't count on help from them when we are down and out... rather let's foresee this action and help our nations homeless and discouraged! Let's help someone right here at home.. a local felon, a misguided drug dealer... whatever the case let's STOP SPENDING OVERSEAS and charge 50% sales tax to companies selling to OverSeas investors and make more laws requiring owners and shareholders to live IN America at least 51% of each year to avoid huge taxes! ... think about it... Earth is flourishing and it's time to realize our peak without living like some country that it's people are LUCKY if they spend $2.00 a day on food!
How many of us realize that in Vietnam there are "McDonald" companies? and "KFC" and many other companies (according to my Vietnamese boss) and their meals are a mere $0.50 each... !!! Why? is their work worth more than ours? Because at the end of a week here I'm lucky to get to enjoy ONE fast food meal a week... Sincerely.. White and FED UP!
I'm awful sick of America allowing these migrants/immigrants to come work and send money home every week TaX free while I every month give more in taxes than my Car Payment! EVERY MONTH! Just so some underage girl can have ANOTHER kid so they get more food-stamps and a large house limit of money to spend... let's unite and MAKE the government listen. Let's only help with ONE KID! Women should only get child support from ONE Father for ONE kid... (forcing them to close their legs!) kids are NOT a meal-ticket ... how will poverty stricken children get a hand up? from the money we'll all save by not allowing a single female to get more aid than one child... ever heard of MARRIAGE? it's this old form of love we used to show our partner.. Divorce? I think not... separation sure.. but start by reading the Bible and understanding there's something a little more at stake here than ourselves and that's the EARTH!
The American government should not be out-sourcing jobs to lower bidders in other countries... start using our prisons as a resource and allow those people in them a way out though work... though "slavery" after-all it's how nearly every country began why change something that works... ? (slavery is in no way "correct" however if people are doing 15 years.. let them out in 7 in return for some "slave" work that will benefit everyone in America.. sow cloths make shoes build homes... allow the Under-privileged to have a leg up!
7-14-2008 @ 6:12PM
EaglesEyes said...
Greed...nothing but greed! With the dollar at an all time low, American businesses are now vulnerable to foreign take over at an even faster pace! GOD help us! So...to teach these greedy companies a lesson...I vote for the boycott of all Bud beverages, too, as well as skipping their amusement parks. What a shame. I can see the Bud commercials now...the frogs will be speaking French and the clydesdales/wagons will be replaced by little Citroen trucks. You can bet InBev will be moving in to cut costs in order to increase profits...standby!
:(
7-19-2008 @ 6:55PM
Tom Carter said...
Drink PBR...it's now the largest AMERICAN OWNED Brewery in the US. I'll support PBR instead in InBev.
8-09-2008 @ 11:52AM
ryuge said...
This is the InBev-Budweiser ad I would like to see on TV during the Olympics:
http://www.youtube.com/watch?v=41GrhuSpaKo