ST. LOUIS/BRUSSELS, Belgium – The maker of the King of Beers has agreed to go to work for the Belgian brewer InBev.
Anheuser Busch Cos. said early Monday it had agreed to a sweetened $52 billion takeover bid from Inbev, heading off what had promised to be a long and acrimonious fight for the maker of Budweiser and Bud Light beers.
The deal would create the world’s largest brewer and the fourth-largest consumer product company under the name of Anheuser-Busch InBev.
The board of directors of Anheuser-Busch Cos. Inc. on Sunday accepted a sweetened takeover offer from Belgian brewer InBev SA, according to a joint press release.
“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,” Carlos Brito, CEO of InBev, said in the statement.
For InBev, the maker of Stella Artois and Beck’s, the deal gives an aggressive company an iconic beer brand — Budweiser — to sell into emerging markets where it has already established a firm footprint.
InBev is the world’s second-largest beer-maker behind SABMiller. Anheuser-Busch is by far the largest brewer in the U.S. with more than 48 percent of the market share.
Brito will be chief executive officer of the combined company. Shareholders will receive $70 a share, a $5 increase over the offer Anheuser-Busch rejected in June.
It wasn’t immediately clear how long approval might take. Several Missouri politicians have expressed concerns about the merger — especially how it would affect the approximate 6,000 people employed by Anheuser-Busch in St. Louis.
It also drew the attention of Mexico’s Grupo Modelo. Anheuser-Busch owns a 50 percent share in Grupo Modelo, which said in a statement Monday that its relationship with Anheuser-Busch gives it consent rights to the deal.
“Our agreement with Anheuser-Busch was carefully constructed to ensure we have a definitive say in who our partner is. We are confident that our agreement, which is governed by Mexican law, gives us the right to decide whether or not to consent to the potential acquisition of Anheuser-Busch by InBev,” Grupo Modelo said in a statement.
Grupo Modelo said it had been talking with InBev about how the two brewers could work together if InBev became a minority owner of Grupo Modelo by buying Anheuser-Busch.
InBev said it plans to use St. Louis as its North American headquarters, and that it will keep open all 12 of Anheuser-Busch’s North American breweries.
InBev announced its intent to try to purchase Anheuser-Busch on June 11. The Anheuser-Busch board initially voted against the merger, calling the initial $65 per share offer too low.
That prompted much squabbling between the companies over the past few weeks. InBev filed a motion seeking the removal of all 13 Anheuser-Busch board members; Anheuser-Busch filed suit calling the InBev effort an “illegal scheme” that threatened to defraud Anheuser-Busch shareholders. Among other things, the suit noted that InBev failed to disclose it operates a brewery in Cuba.
Few products are associated with America as much as Budweiser. Its Clydesdale horses are fixtures of Super Bowl ads, and even the label is red, white and blue, with an eagle swooping through the “A.”
“This agreement provides additional and certain value for Anheuser-Busch shareholders, while enhancing global market access for Budweiser, one of America’s true iconic brands,” August Busch IV, Anheuser-Busch president and CEO, said in the statement.
The deal, if completed, also will bring to an end a name synonymous with St. Louis. From college buildings to theme parks to offices to the stadium where the Cardinals play baseball, the Busch name is virtually everywhere in the Gateway City.
Eberhard Anheuser acquired the Bavarian brewery in 1860 and renamed it E. Anheuser & Co. His son-in-law, Adolphus Busch, joined the company in 1864 and it was eventually renamed Anheuser-Busch.
The company survived Prohibition by selling products ranging from ice cream to root beer.
In addition to opposition from politicians and civic leaders, at least two Web sites sprung up opposing the merger. SaveBudweiser.com claims to have more than 60,000 signatures from merger opponents. SaveAB.com hosted a recent anti-merger rally that drew hundreds to downtown St. Louis.
InBev has not said if layoffs will occur as a result of the merger. The company said it expects cost synergies of at least $1.5 billion a year by 2011 over three years. The deal won’t benefit earnings per share until 2010, it said.
Even without the combination, Anheuser-Busch said last month it planned to cut pension and health benefits for salaried employees as part of an effort to slash $1 billion in costs by the end of 2010. The plan called for offering early retirement to 1,300 salaried workers 55 and older.
The cost-cutting effort was part of a strategy to fend off the merger.
By Aoife White, Christopher Leonard