InBev looking at buying Budweiser

[Niseguy]

being reported as a possibility on the financial pages. $46Billion

InBev does Stella Artouis, Brahma and some others.

[rodneyh]

Always thought this car looked slick

[IlliniRacer]

This rumor makes the circuit every 6 months or so.

I don't see Augie Four Sticks doing it until his dad passes on. After that, anything will be fair game.

[Joe in LA]

Step One in Belgium's secret plan to take over the United States.

[AdamM]

Lots of activity on those BUD calls and all of sudden more InBev rumors just sort of pop up. Golly gee, whodda figured?

[SamC]

This rumor makes the circuit every 6 months or so.

Yep. It never has made any sense. Globalizing an industral heavy manufactured good makes great business sense, as the costs of design can be spread across the world, and manufacturered goods can be shipped worldwide.

Beer makes no sense. No matter who owns it, 95% of beer consumed in North America, is going to be made in North America from North American grains. And marketed under the familiar North American brands (Budweiser, Miller, Coors, Labatt, and Molson). ImBev bought Labatt. So what? Still made in the same place, and there simply are no economy of scale gains to be made from the fact that the brewery in Toronto belongs to the same people that own a brewery in Antwerp and in Sao Paulo.

You are never going to see a "worldwide" beer brand in the way Toyota is a worldwide car brand.

[jcollins28]

Step One in Belgium's secret plan to take over the United States.

Belgium beer kicks @$$.

[MarkDonohueFan]

Anheuser-Busch has done everything possible with their business model to ruin the beer business. Maybe their next owner will have the sense not to tell exclusive distributors to demand bars and restaurants to drop competitors in order to sell an AB product. In other words, if you are a little guy, you have to give up Miller or Coors in order to put a Bud product on your menu.

It is insulting to retailers. I hope they get sold and free up Carlsberg from their stable. It is much too good a product to be associated with AB.

[Niseguy]

A quote from today's business sections

"A Busch family member, Adolphus Busch IV, told the Wall Street Journal on Tuesday some family members were open to holding talks with InBev but others wanted to keep the status-quo."

smoke/fire???? possibly

[Jim Wilke]

CNBC is reporting that InBev has made an offer of $65/share. AB closed at $58 today and says they will consider the offer.

[thehairpin]

Beer makes no sense.

I know I took this totally out of context, but I think it's a hilarious non sequitur.

[raskav]

Busch family no longer owns Anheuser Busch?

So they can say whatever, its the board that will make the decision to sell or not.

[rjohnson999]

It makes perfect sense when you factor in the way beer is distributed in the U.S. The Clydesdale's are a fun image, but they have nothing to do with it. The majority of beer in the U.S. is distributed by independent companies with valuable contracts both with their supplier and their customers. As much as anything else, InBev would be buying those contracts which would give its other products much wider distrubtion opportunities.

Yep. It never has made any sense. Globalizing an industral heavy manufactured good makes great business sense, as the costs of design can be spread across the world, and manufacturered goods can be shipped worldwide.

Beer makes no sense. No matter who owns it, 95% of beer consumed in North America, is going to be made in North America from North American grains. And marketed under the familiar North American brands (Budweiser, Miller, Coors, Labatt, and Molson). ImBev bought Labatt. So what? Still made in the same place, and there simply are no economy of scale gains to be made from the fact that the brewery in Toronto belongs to the same people that own a brewery in Antwerp and in Sao Paulo.

You are never going to see a "worldwide" beer brand in the way Toyota is a worldwide car brand.

[THX1138]

Yep. It never has made any sense. Globalizing an industral heavy manufactured good makes great business sense, as the costs of design can be spread across the world, and manufacturered goods can be shipped worldwide.

Beer makes no sense. No matter who owns it, 95% of beer consumed in North America, is going to be made in North America from North American grains. And marketed under the familiar North American brands (Budweiser, Miller, Coors, Labatt, and Molson). ImBev bought Labatt. So what? Still made in the same place, and there simply are no economy of scale gains to be made from the fact that the brewery in Toronto belongs to the same people that own a brewery in Antwerp and in Sao Paulo.

You are never going to see a "worldwide" beer brand in the way Toyota is a worldwide car brand.

It does when they start brewing their other flagship brands at the Labatt plant in Canada so they can continue to sell them in the US as "imported" Fosters, and Sapporo are two that come to mind and there are many others.

[Openracer]

Maybe they can start brewing Bud and others with less water and more taste. Don't fear the Belgians, they actually know what they are doing with beer.

[rjohnson999]

Don't get your hopes up. For the most part, imports, craft brewing and microbreweries are already satisfying that market. The big beer market wants what A-B and Miller make. A good Belgian beer is even less appealing to Joe Six Pack than Chardonnay.

Maybe they can start brewing Bud and others with less water and more taste. Don't fear the Belgians, they actually know what they are doing with beer.

[Niseguy]

InBev bid $46.3 billion, yesterday, A-B board reviewing it.

[use2know]

I wouldn't be surprised if Warren Buffett has a rather large say in how this goes down. He holds quite a bit of AB stock.

Of course, AB could make a move to acquire the outstanding 50% of Modelo ownership to fight this off... increase debt load to drive the price per share beyond what InBev is willing to offer or could afford... This could be fun to watch.

[rjohnson999]

There are many possibilities but mergers and acquisitions as a spectator sport ranks right up there with watching paint dry.

I wouldn't be surprised if Warren Buffett has a rather large say in how this goes down. He holds quite a bit of AB stock.

Of course, AB could make a move to acquire the outstanding 50% of Modelo ownership to fight this off... increase debt load to drive the price per share beyond what InBev is willing to offer or could afford... This could be fun to watch.

[MD-IRLFAN]

InBev does Stella Artouis, Brahma and some others.

My $.02 - Stella is overpriced and far inferior to Pilsner Urquell.

That is all.

[IowaBoyinIndy]

Gents there is more to this than just watching what AB does or doesn't do. You are talking mucho advertising dollars all over the world that affects multiple sports leagues - their advertising for the Super Bowl alone dwarfs many a company's entire budgets. And they are huge in motorsports. I think the potential ramifications are larger than we realize. IBiN

[lou reed]

My $.02 - Stella is overpriced and far inferior to Pilsner Urquell.

That is all.

Amen to that.

and werent miller AND coors bought by foreign investors? or am i making that up...dont remember the fuss about that.

[lou reed]

Gents there is more to this than just watching what AB does or doesn't do. You are talking mucho advertising dollars all over the world that affects multiple sports leagues - their advertising for the Super Bowl alone dwarfs many a company's entire budgets. And they are huge in motorsports. I think the potential ramifications are larger than we realize. IBiN

what exactly are those potential ramifications? are we not going to see super bowl commercials anymore with horses kicking field goals?

[midtown]

Amen to that.

and werent miller AND coors bought by foreign investors? or am i making that up...dont remember the fuss about that.

Miller was bought by SAB, Coors merged with Molson and now SAB-Miller and Coors-Molson are merging, or something like that.

[SamC]

Miller was bought by SAB, Coors merged with Molson and now SAB-Miller and Coors-Molson are merging, or something like that.

It is a little complicated.

Miller was the #2 US brewer and belonged to Phillip Morris, which was a three legged conglomerate of Miller, Marlboro, and Kraft. The smokes liability was killing the stock, so they spun Kraft off as a seperate company and merged Miller into a company called South African Brewers, or SAB, which despite the name is more British than South African and which owned brands of beer all over the world, other than the US and Canada. This formed SABMiller, the world's second largest brewer, with its Miller Brewing being #2 in the USA.

Coors was the #3 US brewer, and it also had a major British division, having bought the Carling Brewing company (Carling in the USA and Canada are seperate). It merged with Molson, which is in an eternal 50-50 tie with Labatt (owned by InBeV) in Canada, forming MolsonCoors. This made MolsonCoors #3 in the USA, a more or less tied for #1 in Canada, and a significant player in Great Brittan.

Then, MolsonCoors and SABMiller agrred to from a joint venture called "MillerCoors" in the USA only. The government agreed to this just last week. MolsonCoors and SABMiller remain competitors in every other country in the world, including Canada.

Assuming the InBev-AB merger goes through, the world mass market beer will look like this, in order of sales:

InBev/A-B, SABMiller, Heiniken, and MolsonCoors.

The USA will look like this:

InBev/A-B 50%, MillerCoors (joint venture between SABMiller and MolsonCoors) 45%, rest 5%.

Canada will look like this:

MolsonCoors 49%, InBev (Labatt) 49%, rest 2%.

[lou reed]

It is a little complicated.

Miller was the #2 US brewer and belonged to Phillip Morris, which was a three legged conglomerate of Miller, Marlboro, and Kraft. The smokes liability was killing the stock, so they spun Kraft off as a seperate company and merged Miller into a company called South African Brewers, or SAB, which despite the name is more British than South African and which owned brands of beer all over the world, other than the US and Canada. This formed SABMiller, the world's second largest brewer, with its Miller Brewing being #2 in the USA.

Coors was the #3 US brewer, and it also had a major British division, having bought the Carling Brewing company (Carling in the USA and Canada are seperate). It merged with Molson, which is in an eternal 50-50 tie with Labatt (owned by InBeV) in Canada, forming MolsonCoors. This made MolsonCoors #3 in the USA, a more or less tied for #1 in Canada, and a significant player in Great Brittan.

Then, MolsonCoors and SABMiller agrred to from a joint venture called "MillerCoors" in the USA only. The government agreed to this just last week. MolsonCoors and SABMiller remain competitors in every other country in the world, including Canada.

Assuming the InBev-AB merger goes through, the world mass market beer will look like this, in order of sales:

InBev/A-B, SABMiller, Heiniken, and MolsonCoors.

The USA will look like this:

InBev/A-B 50%, MillerCoors (joint venture between SABMiller and MolsonCoors) 45%, rest 5%.

Canada will look like this:

MolsonCoors 49%, InBev (Labatt) 49%, rest 2%.

excellent recap

talk radio (if your in to that brand of entertainment to make the work day pass) has been over run with calls in the last few days of our protectionist co-americans angered by the possible sale of this american icon to furrin investors...days after the chrylser building no less.

more specifically, they are worried that the ratings for the clydesdale commercials will be relegated to espn classic, bars will struggle to draw crowds, and the Great American Beer festival will never be "what it once was".

[AdamM]

It's hard to see any real difference (other than Busch IV not running the show, which is probably a plus) the merger will make on consumers and most AB employees. InBev will probably take on the AB name and use St. Louis as the base to run their combined America's business. InBev has almost no overlapping production facilities with AB, they use AB's distribution network already and it's not like they're going to stop advertising.

[Niseguy]

Bud has rejected offer, InBev now going hostlie in its takeover attempt.

This is a classic case of a weak dollar allowing the foreign companies to cherry pick our businesses.

[jonovision_man]

Bud has rejected offer, InBev now going hostlie in its takeover attempt.

This is a classic case of a weak dollar allowing the foreign companies to cherry pick our businesses.

Yup... American companies were doing it up here in Canada when our dollar was weak, now it's strong and the tables are turned, Canadian companies have taken over a few American ones. Not to mention all the real estate bargain hunters snatching up discount properties in Florida...

jono

[Indyknut]

Busch family no longer owns Anheuser Busch?

So they can say whatever, its the board that will make the decision to sell or not.

The Busch family has slowly sold off their controlling interest in the company over the years. I believe they own about 4% at best. Warren Buffet, OTOH, owns 5%.

In any event, this is a massive story here in St Louis. The civic and philanthropic contributions that AB makes towards this city is still being added up. It's going to be a big hit and has the cities movers and shakers in an uproar. I guarantee InBev will not carry on those traditions.

At this point it would be better for the board to be discreetly negotiating with InBev and working towards a deal that maintains the true essence of what AB has been about all these years. There's even been talk of negotiating InBev to make monetary endowments towards some of AB's longtime charitable organizations of choice. We'll see.