Blog: Big is beautiful
Chris Brook-Carter | 31 August 2004
With a new name – InBev - and a new board, the world’s largest brewer was finally unveiled to the market over the weekend, and it appears to be hitting the ground running.
Late on Friday, shareholders in Belgian brewer Interbrew voted 100% in favour of a merger with Brazil’s AmBev. AmBev shareholders approved the deal later at a meeting in Brazil. By Monday a new board was announced, which includes CEO John Brock who has indicated that the company is not satisfied with being the number one brewer by volume.
Brock said Friday that a main focus of InBev will be to increase its profit margin to 30% from 25%.
Anheuser-Busch is still the world’s number one in terms of revenue and has a profit margin of 28%. “We’d like to beat them,” said Brock. “We think we can reach that 30% target over the next few years.”
But Brock has also hinted that the company’s expansion aspirations are far from over. Not only has he said that InBev has enough cash to buy a market-leading brewer, but he has also warned the industry that he wants the company to grow organically in the markets where it already has a presence.
It would be foolish to bet against InBev going after these goals in the aggressive manner that has become Interbrew’s hallmark. Although Interbrew has had its doubters in the past who have criticised the company for what they see as a ‘gung-ho’ acquisition policy, few can argue with the fact that, in the space of a decade, the Belgian family-owned brewer has gone from the world’s number 17, in terms of volume, to number one.
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