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Anheuser-Busch is sold to beer giant in Belgium

By Robert Trigaux and Mark Albright, Times Staff Writers
In print: Monday, July 14, 2008

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One of America's biggest cultural icons — the Anheuser-Busch Cos. of St. Louis, maker of Budweiser — agreed Sunday evening to be acquired for about $52-billion by Belgian brewer InBev NV.

The deal, first reported on the Wall Street Journal's Web site citing unnamed sources, would create the world's largest beermaker and turn control of 10 Anheuser-Busch theme parks — including Busch Gardens and Adventure Island in Tampa and SeaWorld in Orlando — over to the Belgian-Brazilian conglomerate.

In a joint news release, the companies said that Anheuser-Busch shareholders would receive $70 a share in cash and that the combined companies would be called Anheuser-Busch InBev. The Journal said Anheuser-Busch would have two seats on the company board.

In past remarks, InBev chief executive officer Carlos Brito has said the combined company's more than $36-billion in annual sales and 12-billion gallons of beer shipments would allow the negotiation of better terms from suppliers as expenses soar for barley, hops, electricity and metal for cans.

Sunday's $70-a-share deal appears to conclude what started as an acrimonious takeover attempt. After the original bid was rejected last month, InBev sought to replace the Anheuser-Busch board of directors with one of its own.

While Anheuser-Busch resisted selling, InBev courted the St. Louis company last week and began friendly discussions after increasing its offer by $5 a share.

The fate of Anheuser-Busch's theme parks, including Tampa's Busch Gardens, is less clear. While analysts have predicted the entertainment unit will be sold off to help InBev pay for its hefty acquisition, it's hard to pinpoint a likely buyer.

Analysts say it is doubtful the Walt Disney Co. would be interested and, given the struggling economy, other theme-park businesses are not in expansion modes. The most likely buyer, analysts suggested, may be a private equity firm.

InBev so far has indicated its primary interest is in brewing beer, but it will look closely at the 10 theme parks — five of them are in Florida — whose value is pegged at between $2.2-billion and $2.9-billion, according to Lehman Brothers.

The end of Anheuser-Busch as a symbol of heartland America is deeply unpopular in St. Louis, where the brewery company is a major employer and regional leader. Industry consultants point to InBev's reputation for ruthless cost-cutting, and Missouri's governor and two U.S. senators have opposed the deal.

On the other hand, InBev has pledged that St. Louis would remain the North American headquarters and that none of Anheuser-Busch's breweries would close. And in one nod to a long tradition, InBev said it will keep Budweiser as the new company's flagship brand and keep the beer company's famed Clydesdale horses.

The deal is subject to shareholder approvals and would end Anheuser-Busch's roughly 150 years of independence.

InBev has more annual sales than any other brewer and would overtake SAB Miller Plc as the world's largest beermaker by volume as it puts the Budweiser brand together with its Bass ale and Beck's lager.

While Anheuser-Busch controls nearly half of the U.S. market with brands like Budweiser and Bud Light, InBev has strong positions in Western Europe and Latin America and is growing in Eastern Europe and Asia. Together, the two beer giants hawk about 300 brands that also include Michelob and InBev's Stella Artois.

Anheuser-Busch also owns 27 percent of China's Tsingtao Brewery Co. Ltd. and a stake in Mexico's Grupo Modelo.

Billionaire investor Warren Buffett's Berkshire Hathaway Inc. is Anheuser-Busch's second-largest shareholder with a 5 percent stake. Barclays Plc owned 6.1 percent of the U.S. brewer as of March 31, according to data compiled by Bloomberg.

The Belgian company is seeking control of half of the U.S. beer market and aims to grow in China, aided by Anheuser-Busch's piece of the Tsingtao Brewery Co., the country's second-largest brewer.

Information from the Wall Street Journal, St. Louis Post-Dispatch, Bloomberg News and Associated Press was used in this report.