Significant beer deal brewing?

Posted by Daniel Palmer on 26th May 2008

Rumours abound about a major takeover in the beer industry.

InBev, the Belgian-based owner of the Beck’s, Stella Artois and Hoegaarden brands, is apparently considering a $46b bid for US brewer Anheuser-Busch. The takeover speculation, reported at the end of last week by the Financial Times, led Anheuser-Busch to a 52 week high on the New York Stock Exchange.

Anheuser-Busch, which manages the Budweiser brand, is expected to try and stave-off any unsolicited bids from InBev, but the weak US dollar has helped make them susceptible to such a deal. Further, the Busch family, who are against a takeover, no longer have a controlling stake in the company and an offer by InBev could garner enough shareholder support, at the right price. However, with InBev being the second biggest beer brewer by volume in the world and Anheuser-Busch a close third, a takeover deal could prove difficult to orchestrate.

Speculation has continued to grow since Friday and the Financial Times has now reported that if the takeover does not go ahead InBev may instead seek a merger with SABMiller, the world’s largest brewer by volume. The newspaper added that SABMiller and InBev have already held informal discussions about a possible merger but both companies are yet to make public their intentions.

Either via a merger or takeover, a major shake up of the beer industry could be on the cards, and expect a public outcry from Americans if their iconic Budweiser brand falls into foreign hands.