InBevs Acquisition of Anheuser -Busch

A Mega Cross Border Deal

The Global Beer Industry

Global

beer production in 2007 was 1,8 billion hectoliters ( 5,2 jump from previous year) The Global beer industry is dominated by China followed by US, Russia and Germany Sources of growth 2006 and 2011 are 1. Asia 55% 2. East Europe -19,5% 3. Central and South America -19,5% 4. Middle East and Africa 6%

Main producers before deal

About InBev

InBev is a publicly traded company (Euronext: INB) based in Leuven, Belgium. The company's origins date back to 1366, and today, it is the leading global brewer. It has portfolio of more than 200 brands. This includes true beer icons with global reach like Stella Artois and Becks, fast growing multicountry brands like Leffe and Hoegaarden, and many consumer loved "local champions" like Skol, Quilmes, Sibirskaya Korona, Chernigivske, Sedrin, Cass and Jupiler. InBev employs close to 89 000 people, running operations in over 30 countries across the Americas, Europe and Asia Pacific. In 2007, InBev realized 14.4 billion euro of revenue.

About A-B

Based in St. Louis, Anheuser-Busch is the leading American brewer, holding a 48.3 percent share of U.S. beer sales to retailers. The company brews the worlds largest-selling beers, Budweiser and Bud Light, and distributes these and many other popular brands through a strong network of more than 500 independent wholesalers. Anheuser-Busch operates 12 breweries across the United States, is a major manufacturer of aluminum cans and has been a leading aluminum recycler for more than 30 years. Anheuser-Busch also owns a 50 percent share in Grupo Modelo, Mexico's leading brewer, and a 27 percent share in China brewer Tsingtao, whose namesake beer brand is the country's best-selling premium beer.

Timeline of events
May

23rd 2008 Reports indicate that InBev is preparing a takeover bid for A-B May 29: A-B's board of directors meets to discuss rumors regarding InBev. It also discusses a potential meeting between A-B and InBev representatives. June 2 - A-B CEO August A. Busch IV meets with InBev representatives - Brazilian beer billionaires Jorge Paulo Lemann and Marcel Telles - in Tampa, Fla. InBev indicates it is interested in pursuing a deal, but the Belgian brewer doesn't present a proposal.

 June

11 - InBev sends a letter to the Anheuser-Busch board offering to buy the company for $47.5 billion, or $65 per stock share. June 20: The move leaves the board at 13 members who considers and discusses InBEVs proposal and strategic alternatives, including a standalone plan. On the same day, Adolphus Busch IV, the uncle of CEO August Bucsh IV, sends a letter to the A-B board in support of the sale.

 June

26 - A-B board unanimously rejects InBev's proposal, calling the bid "financially inadequate. InBev, preparing to launch a hostile bid, files a suit in Delaware seeking a judgment to confirm that the entire A-B board could be removed without cause. June 27 - A-B executives discuss enhanced cost-cutting plan and higher earnings target as part of its defense against InBev.

 July

7 - InBev outlines efforts to oust A-B's board and install its own nominees, which includes Adolphus Busch IV, the uncle of Anheuser-Busch CEO August A. Busch IV. July 8 - A-B, InBev start secret discussions to sweeten the offer. The next day, InBev says it's ready to offer $70 a share. July 13 - A-B board agrees to InBev's offer of $52 billion, or $70 a share.

Impact or the Merger

InBev

plans to make Budweiser a premium brand in fast growing markets as China and Russia. (A-B were in uncomfortable position outside the US) Developing export markets Geografic deversification InBev now can use distribution channels of A-B Cost cuts Cost savings (40% of revenues) Taking a leading place on the market