May 27, 2008
just-drinks.com editor's weekly highlights
BALTIKA Breweries is one of the major brewing enterprises in Europe with production capacity over 49.5 MHL. The Company owns over 35 beer brands on sale. More than 70% of Russian beer export is produced by BALTIKA Breweries.
The prospect of Anheuser-Busch and InBev slugging it out in a hostile takeover battle has all the attractions of a great heavyweight-boxing bout. Anheuser and InBev both have claims to the world title, A-B by value, InBev by volume. This clash could finally decide who is the out and out champion.
Add in the possible addition of another young pretender to the fray in the form of SABMiller and you can see why the world’s media has already gone crazy over this deal, despite no formal approach by InBev as yet. Rocky VII eat your heart out.
So far, little has been confirmed by either party. InBev is believed to be weighing an unsolicited bid for Anheuser, which analysts think will top US$45 billion, making it the largest beer acquisition ever.
It is also widely believed that the A-B board will reject the offer, with CEO August A. Busch IV, who only took over the company reins from his father 18 months ago, particularly opposed. And who can blame him? In its piece on the deal today, the Wall Street Journal said that if the deal goes through, “Mr Busch could be remembered as the Busch family member who let an American icon slip into foreign hands.” Hardly a ringing endorsement of his tenure.
Yet even within the Busch family a united front against a foreign knock-out blow may be unlikely. Comments by one Busch-family member, Adolphus Busch IV, suggested he and some other family members are open to the idea of Anheuser and InBev sitting down to discuss a possible deal.
“There are members that absolutely want it to stay status quo," Adolphus Busch told the Wall Street Journal. "There are others that say they want to see some kind of chance to enhance shareholder value.”
If that didn’t already pose an interesting enough plot for you, then news this morning that SABMiller’s share price was up on speculation it may still be involved in all this only adds to the intrigue.
The UK-based brewer is thought to have been InBev’s initial target before it turned its attention to Anheuser-Busch. There is now talk that, should its US bid fail, InBev will return its focus to the owner of Castle lager.
Away from beer, acquisitions were the talk of the soft drinks industry too. Reports out of Australia have claimed that Coca-Cola Amatil could be gearing up for a major acquisition push, possibly for Foster’s Group.
Meanwhile, the wine and spirits calendars were dominated last week by the London International Wine Fair and Distil. We would like to take this opportunity to thank everyone who took the time to visit our stand or played host to us on theirs. As ever, it was a pleasure to meet our readers face to face. For our reaction to the show, it’s worth checking out my blog.
For those of you unable to attend, the highlight of our week was the launch of our second annual UK wine survey.
Over 50 of the country’s leading wine industry figures were invited to take part and the results threw up some challenging views of the UK market, not least on its dwindling importance on the global scene.
Until next time...
Olly Wehring, Managing Editor
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A net loss in the last fiscal year and the global credit crunch may have led some to believe that Constellation Brands’ rampaging acquisitive growth strategy may have to be put on hold. In the second part of this month’s just-drinks interview, Constellation CEO Rob Sands suggests the emphasis is currently on creating efficiencies in existing businesses but that Constellation has lost neither its will nor the wherewithal to make further acquisitions.
This month's briefing is the 2008 edition of "The Power 100", published by leading consultancy Intangible Business, which looks at the key issues affecting the wines and spirits industry and identifies the brands which have performed well - and those that have experienced difficulties over the past year. This annual report, into the most powerful spirits and wine brands in the world, takes into account the consumer's perception of brand strength and its financial performance, using a robust methodology. A panel of leading international drinks experts are asked to score each brand on a variety of measures and these scores are combined with hard volume data to create a league table of the most powerful international drinks brands in the world.
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