Belgian brewer InBev NV
is apparently on the prowl again, and it has reportedly prepared a $46 billion bid for St.Louis-based Anheuser-Busch Cos., and an alternative one for SABMiller plc. The speculation has led to some frothy discussion in the blogosphere and on the message boards.
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FT Alphaville, which
broke the story last week,
is now reporting that a takeover of SABMiller may be "Plan B" and the company may formally consider a £22.6 billion bid ($44.8 billion) from InBev after it completes its U.S. beer joint venture with Molson Coors Brewing Co. If InBev does bid for Anheuser-Busch, it has
arranged a $50 billion financing package through J.P. Morgan Chase & Co. and Banco Santander SA.
Anheuser-Busch faces a hostile bid for a few reasons, according to
Professor Michael Roberto's Blog.
First, the firm has struggled recently with a substantial change in consumer tastes in US. Consumers are buying more craft brews or imports when they drink beer, but the bigger problem is that they are substituting spirits and wine for beer. Second, Anheuser Busch is highly reliant on the North American market. They have not been able to expand successfully in many parts of the world.
Despite Anheuser-Busch's troubles, there are a number of reasons that InBev's bid may fall through. First, it is anticipated that the Busch family will not be willing to give up its five-generation reign over the company. Second, Anheuser-Busch owns 50% of Modelo, which the privately held company could buy back its stake in the event of a merger. Furthermore, the Teamsters and the residents of St. Louis are not too thrilled about a potential merger -- of course, plenty of deals get done despite labor and local opposition.
For an example of labor's concerns, a Yahoo! message board user Manko717, who claims to be a Teamster, wrote:
It is the only logical answer. Nobody has mentioned the relationship between the Teamsters and Anheuser-Busch in recent articles, but we have been partners over the years. Sure, there have been differences, but people are still working and being paid Negotiated Union Wages and Negotiated Benefits. The Teamsters may be the "Ace in the Hole" for Mr. Busch - because the AB employees know what InBev will have to do, to cut costs "their way" - and that will be - CUT JOBS - SALARIED AND HOURLY. So here is a message to the "InBev Board" that is set to meet - "If you want us - come and get us" - but we don't want you" - and if the Teamsters walk out - it will be something you cannot handle - because everyone will walk - even the Distributors - because they know you want "Direct Delivery" - cutting their throats.
However, the message boards suggest shareholders may be interested in a deal. WMwithrow said:
If management does not take this deal, I will cash out at $50 or higher and move into DEO. I've been very patient with this company and its management, but they have been unable to deliver. If someone else is able to pay a higher value for the company than they can deliver, they should take it... Maybe the family should arrange financing and take us out if they are not going to consider any offers.
If InBev does bid for either Anheuser-Busch or SABMiller, it could lead to
consolidation in the industry, and other companies could brew up more deals.
- Maria Woehr
