GLOBAL: InBev wins Anheuser-Busch's arm

InBev has lined up the acquisition of Anheuser-Busch, after the brewer raised its offer for the US company.

InBev has this morning (14 July) confirmed that it will "combine" operations with A-B, at a price of US$52bn - equating to $70 per share. The transaction will see A-B's president and CEO, August Busch IV, and one other current or former A-B director join the InBev board, with the US brewer becoming a wholly-owned subsidiary of InBev.

The combined entity will henceforth be known as Anheuser-Busch InBev, with St. Louis, Missouri being the North American headquarters and home of the flagship Budweiser brand. InBev has maintained that no A-B breweries in the US will be closed, once the transaction has been completed.

"We are extremely excited about the opportunities that this combination will create for consumers worldwide, as well as our shareholders, employees, business partners and wholesalers," said InBev's CEO, Carlos Brito, who will continue in the position for A-B InBev. "Together, A-B and InBev will be able to accomplish much more than each can on its own. We have been successful business partners for quite some time, and this is the natural next step for us in an increasingly competitive global environment. This combination will create a stronger, more competitive global company with an unrivaled worldwide brand portfolio and distribution network, with great potential for growth all over the world."

August Busch IV added: "This agreement provides additional and certain value for Anheuser-Busch shareholders, while enhancing global market access for Budweiser. We will leverage our collective strengths to create a truly diversified, global company to sustain long-term growth and profitability. In the US and Canada, both InBev and A-B have seen significant benefits from our existing relationship and we look forward to replicating this success in other parts of the world."

InBev noted that the transaction is expected to be neutral to normalised earnings-per-share in 2009 and accretive beginning in 2010. The return on invested capital will exceed weighted average cost of capital during the second year after close.

Although the transaction is subject to the approval of InBev and A-B shareholders, and other customary regulatory approvals, the two companies said they expect the transaction to close by the end of this year.