Make us your home page
Instagram

Buyer to decide if theme parks, beer mix

How much beer sells because of feel-good brewery investments like theme parks?

The question jumped to the front burner Monday once Anheuser-Busch Cos. agreed to be sold to Belgian beer giant InBev for $70 a share in cash.

The $52-billion sale creating what's called Anheuser-Busch InBev won't close until year's end. But InBev is scrutinizing the theme parks — including the three Sea Worlds and Busch Gardens in Tampa and Williamsburg, Va., plus the brewer's huge aluminum can recycling operation — as divestitures to help pay the 40 percent premium for America's last domestically owned brewing dynasty.

That's because this deal is all about the beer. Anheuser-Busch InBev was crafted to be market share leader in the world's five top beer-drinking countries.

"There is very little overlap between the two companies," said Carlos Brito, chief executive officer of the company that will emerge with 25 percent of the world beer market. "This makes us the global leader in beer and the third largest consumer products maker in the world" behind Procter & Gamble and Nestle.

InBev will juggle its stable of 200 beer brands including flagships Stella Artois, Bass, Leffe and Beck's with 150 brands and styles including top-selling Bud Light made by Anheuser-Busch.

Combined, the 10 Busch parks and the recycling business are worth about $5-billion, analysts say.

They always have been regarded as part of Busch's marketing to make beer appear more family friendly and the company socially responsible.

August Busch Jr., who kept a home in St. Pete Beach when his St. Louis Cardinals wintered in the bay area, opened Busch Gardens next to his new Tampa brewery in 1959. His successor and recently retired chairman, August Busch III, grandson of the company's co-founder, remained a theme parks fan by investing in them even after he closed the Tampa brewery and sold the Cards a decade ago. But 43-year-old August Busch IV, who will give up his role as chief executive to be one of 13 corporate directors in the new company, rarely visited the parks.

The parks are profitable, doing $162-million in net income in 2007 on revenues of $1.3-billion.

The new owners said Monday that they will not yet reduce a marketing budget that is the nation's biggest buyer of pro sports ad and marketing deals. Brito regards them as "pillars that support" the beer brands in the United States. The Clydesdales and Grant's Farm tourist attraction in St. Louis will stay.

But Brito offered no assurance to the parks, which must prove their worth to avoid being sold or spun off.

Because of the credit crunch and weak economy, analysts see few bidders. Earmarked in the $9.8-billion in new equity and $45-billion in added debt InBev lined up to pay for the acquisition is $7-billion in bridge financing for unidentified divestitures.

"Spinning the parks off on their own IPO with the current management may be the best option," said John Gerner, managing director of Leisure Business Advisors, a Richmond, Va., consultant. "They can license the Busch name if needed."

Cutting costs to bolster profit is key to making the acquisition work. It is the same force driving beer industry consolidation in all mature beer markets like the United States.

That's a specialty of the no-frills InBev culture, in contrast to Busch, which operates like a family fiefdom. Busch has a fleet of corporate jets. InBev executives fly coach unless flights are longer than six hours, when they use business class. Unlike Busch, there are no company car perks or freebies like the monthly free case of beer handed even to theme park full-timers.

A few years ago, InBev was criticized for forcing recalcitrant brewery workers to do pushups and perform silly dance steps, a motivational tactic since banned.

A Brazilian who holds a Stanford MBA, Brito will move ahead on Busch's own $1-billion profit improvement plan that includes higher prices for premium products like Bud Light Lime and early retirement for about 10 percent of the Busch work force. Plus, he has set a goal of $400-million more in reduced costs by 2011.

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Brewery giants

Anheuser-Busch has agreed to be sold to Belgian brewer InBev for $52-billion, creating the world's largest brewer.

InBevAnheuser-Busch

Total volume in billion gallons7.24.0
Revenue$22.4 billion$2.1 billion
Number of brands +200+150
Number

of breweries
12327
Number of employees89,00030,849
HeadquartersLeven,

Belgium
St. Louis
Main Markets Holding No. 1 or No. 2 position in more than 20 key markets (mainly Europe and S. America)U.S. (48.5 percent of total U.S. beer sales)

Buyer to decide if theme parks, beer mix 07/14/08 [Last modified: Friday, July 18, 2008 4:53pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Walmart expands grocery delivery service to Tampa

    Retail

    TAMPA — Walmart is expanding its grocery delivery service to Tampa, the company announced Monday. Five locations will offer delivery for online grocery orders.

    Walmart is expanding its grocery delivery to Tampa, the company announced Monday. | [Times file photo]
  2. Marina at Hudson Beach poised to become 24-unit condominium-hotel

    Business

    HUDSON — One of the mainstay businesses at Hudson Beach is poised for redevelopment into a 24-unit condominium-hotel.

    The owners of Skeleton Key Marina in Hudson have filed preliminary plans with Pasco County to redevelop the site into a 24-unit condominium-hotel.
  3. Have your say Tampa Bay on the region's future transit options

    Mass Transit

    TAMPA — It's time, yet again, for Tampa Bay residents to tell officials what kind of transit options they want for their region.

    The Cross-Bay Ferry docks at the Tampa Convention Center on its maiden voyage on Nov. 1, 2016. A regional premium transit study will determine whether a ferry, or other options such as express buses or light rail, would be a good addition to Tampa Bay. [SCOTT KEELER  |  Times]
  4. SOCom seeks civilian drone pilots to develop new technology through ThunderDrone

    Macdill

    TAMPA — For the last three years, Nicole Abbett has been using drones as part of her photography business, with clients like the city of Tampa and construction companies.

    Josh Newby, 31, Palm Harbor, of Tampa Drones fly's a drone in England Brothers park, Pinellas Park, 8/25/16. As drone popularity increases as a hobby and business, local governments are navigating a legal grey area- where, when, and how should drone flights be allowed?
  5. New apartment complex delivers unique floor plans



    Business

    RIVERVIEW — A new luxury apartment community has opened in the Progress Village area touting itself as a distinct living option just 10 miles from downtown Tampa.

    Alta at Magnolia Park dubs its new apartment community, that opened earlier this year in Riverview, a modern and distinct option for living just 10 miles from downtown Tampa.