Sunday, July 13, 2008

$51bn deal creates global beer behemoth

THE brewers of Stella and Budweiser are to join forces in a $US50 billion ($51.7 billion) deal that will create the world's largest beer maker.

Belgium-based InBev, which makes Stella Artois, will take over US brewer Anheuser-Busch, which makes Budweiser. Neither company were immediately available to comment.
The combined company will be called Anheuser-Busch InBev, said a source familiar with the deal, who agreed to speak on condition of anonymity. Anheuser will get seats on the new company's board, but it was not immediately clear how many.
Anheuser controls nearly half the US market with brands like Budweiser, Bud Light and Michelob, InBev has strong positions in Western Europe and Latin America and is growing in Eastern Europe and Asia.
InBev, which was formed by the 2004 merger of Belgium's Interbrew with Brazil's AmBev, is based in Belgium and run by a mostly-Brazilian management team.

Adding another dimension to any deal was Mexico's largest brewer Grupo Modelo, which is 50 per cent owned by Anheuser. The maker of Corona beer, which has the right to choose its partner, has not yet approved InBev for that role and the two brewers remain in talks, according to one person familiar with the situation. 
The deal brings an amicable resolution to a month-long saga that was becoming increasingly hostile as the two companies sued each other and InBev set the stage to try to replace Anheuser's board of directors.
InBev had proposed its own slate of nominees for the board that included Adolphus Busch IV, an uncle of the current chief executive of Anheuser-Busch.
InBev lured Anheuser to the bargaining table last week by raising its offer to $US70 per share from $US65 per share, a 27 per cent premium over Anheuser's record-high stock price in October 2002.
Shares of InBev and Anheuser surged on Friday as news of the higher offer and the negotiations emerged. Anheuser closed up 8.6 per cent at $US66.50, and InBev closed up more than 7 per cent. 
Sources had said that the two companies and their advisers had talked in New York over the weekend, working through details such as the name for the combined company, roles for Anheuser's executives and the structure of the board. The breakup fees if the deal collapses also were discussed over the weekend, the sources said.
Takeover outcry
A takeover of iconic US company Anheuser has sparked an outcry from some politicians, including Democratic presidential candidate


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