Belgian Budweiser?

Posted by Daniel Palmer on 12th June 2008

Consolidation in the beer industry has been a noticeable trend over the past decade but the potential takeover of Anheuser-Busch by InBev would certainly shake the sector up. If the deal goes ahead it would merge together the second and third largest brewers in the world, creating one of the five largest consumer products companies and the largest brewing corporation – eclipsing current leader SABMiller.

The audacious offer by InBev, owner of the Beck’s, Stella Artois and Hoegaarden brands, is consistent with the plans of the company to create the world’s largest brewer.

The official announcement was anticipated after intense speculation over the past couple of weeks, though, there had also been reports that InBev were involved in talks with SABMiller with regard to a possible merger.

Anheuser-Busch’s board has claimed that they “will evaluate the proposal carefully and in the context of all relevant factors, including Anheuser-Busch’s long-term strategic plan”, but appear unconvinced by the offer. If they decide to oppose it InBev could simply bypass the board and go straight to shareholders with a hostile offer.

The US Government may also stand in the way of InBev with reports that many politicians and activists are opposing the deal due to fears it could cost jobs, not to mention the issue of allowing the iconic American company to fall into foreign hands. The owner of the Budweiser brand was, after all, named the number one beverage company in FORTUNE Magazine’s list of “America’s Most Admired Companies” earlier this year; eclipsing Coca-Cola and Pepsi for the honour.

Republican Governor of Missouri, Matt Blunt, released a statement outlining his concerns about the company, which started from humble beginnings in St. Louis, Missouri, being purchased by overseas interests. “I am strongly opposed to the sale of Anheuser-Busch and today’s offer to purchase the company is deeply troubling to me. I have said that while I am supportive of action to prevent the sale there is no immediate tool available at the state level to block it,” he advised. “I have directed the Department of Economic Development to explore every option and any opportunity we may have at the state level to help keep Anheuser-Busch where it belongs – in St. Louis, Missouri.”