BELGIUM: InBev tables Anheuser-Busch takeover bid

By | 12 June 2008

InBev has laid to rest months of speculation by making a takeover offer for Anheuser-Busch.

The Belgium-based brewer confirmed today (11 June) that it has offered US$65 per share in A-B, valuing the US brewer at $46.3bn. Should it succeed in its bid, InBev said the combined company would create "the global leader in the beer industry" and one of the world's top five consumer products companies. On a pro-forma basis for 2007, the combined company would generate global beer volumes of 460m hectolitres, net sales of $36.4bn, and EBITDA of $10.7bn.

InBev also said that it would make A-B's home town of St. Louis the headquarters for the North American region. In addition, InBev has proposed to name the combined company "to evoke A-B's heritage, reflecting the strong history of A-B's key brands".

A number of A-B's directors would be invited to join the board of the combined company, and InBev would seek to retain "key members" of A-B's management team "across the organisation". "Given the limited geographical overlap between the two businesses and the efficiency of A-B's brewery footprint in the US, InBev would maintain all of A-B's US breweries," the Belgian brewer said.

"We view this combination as a natural next step for both companies, who already enjoy successful partnerships in the US, Canada and South Korea," said Inbev's CEO, Carlos Brito. "In Canada, both InBev and A-B have seen significant benefits from our existing relationship which spans almost 30 years, during which InBev has helped to make Budweiser the number one beer in Canada with average annual volume growth of 7.2% since 1998.

"We also have great admiration for A-B's strategic partner, Grupo Modelo, and hope to work with them to find new opportunities to accelerate the development of the Grupo Modelo brands outside of North America."

InBev said it had received "strong support" from financial institutions including  Banco Santander, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING Bank, JPMorgan and Royal Bank of Scotland to assist in providing the financing required to complete this transaction. "The transaction will be financed with at least $40bn in debt, and a combination of divestitures of non-core assets and equity financing," InBev added.

When contacted by just-drinks, a spokesperson for A-B confirmed that the company had received the offer. "(A-B's) board of directors will evaluate the proposal carefully and in the context of all relevant factors, including A-B's long-term strategic plan," the spokesperson said. "The board will review the merits of the proposal consistent with its fiduciary duties and in consultation with its financial and legal advisers.

"The board will pursue the course of action that is in the best interests of A-B's stockholders." The spokesperson concluded that A-B's board will make its determination regarding InBev's "proposal in due course".

Sectors: Beer & cider

Companies: InBev, Anheuser-Busch, Grupo Modelo

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Focus - InBev's move for Anheuser-Busch

InBev's announcement late yesterday (11 June) that it has made an offer to acquire Anheuser-Busch comes as little surprise. Speculation of a tie-up between the brewers has surfaced over the last 18 months or so. But the amount offered – US$65 per share – certainly looks enticing to A-B's shareholders. So, it's a done deal, yes? Olly Wehring takes a closer look at the offer.

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