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ST. LOUIS — Anheuser-Busch Cos., the nation's biggest brewery, received a $46 billion buyout offer Wednesday from a Belgian brewer that might be too good to refuse.

The maker of Budweiser beer disclosed late Wednesday that InBev SA, whose brands include Beck's and Stella Artois, delivered an unsolicited all-cash bid of $65 a share. It's unclear whether senior Anheuser-Busch executives think the deal makes sense, but shareholders may be drawn to the offer that represents a sizable premium over the company's closing price of $58.35 Wednesday.

If the deal goes through, it would create the world's largest beer company and mark just the latest phase of consolidation in a global brewing industry that is facing rising ingredient costs and stale demand in the United States.

"Anheuser-Busch said that its board of directors will evaluate the proposal carefully and in the context of all relevant factors, including Anheuser-Busch's long-term strategic plan," the company said in a statement. "The board will pursue the course of action that is in the best interests of Anheuser-Busch's stockholders."

A spokeswoman said the company would not comment beyond the statement.

InBev Chief Executive Carlos Brito said the deal would boost both companies, giving InBev access to the U.S. market while expanding Anheuser-Busch's reach overseas.

"We have the highest respect for Anheuser-Busch, its employees and its leadership, who have built the leading brewer in the U.S. and grown the iconic Budweiser brand. Together, we would draw on the collective expertise of both companies' management and employees."

Shares of Anheuser-Busch soared 7.6 percent to $62.80 after hours, when the announcement was made. They had risen 2 percent in late-afternoon trading, when rumors of the deal were reported on CNBC. Speculation has been rife in recent weeks that the deal might occur.

Opposition to a potential takeover has already been fierce in Anheuser-Busch's hometown of St. Louis, and elsewhere in the U.S. The brewer employs 6,000 people in St. Louis, and many workers are worried InBev would cut jobs as the companies consolidate.

Web sites have sprung up opposing the deal on patriotic grounds, arguing that such an iconic U.S. firm shouldn't be handed over to foreign ownership. Republican Gov. Matt Blunt said Wednesday he opposes the deal, and directed the Missouri Department of Economic Development to see if there was a way to stop it.

"I am strongly opposed to the sale of Anheuser-Busch, and today's offer to purchase the company is deeply troubling to me," Blunt said in a statement.

InBev was formed in 2004 when Belgium's Interbrew merged with South America's biggest brewer AmBev. Since then, the company has cut jobs in several European countries while its sales were boosted by strong demand in Latin American countries.

Worries about job cuts at Anheuser-Busch could be justified. InBev has a reputation for squeezing costs out of the companies it acquires, said Benj Steinman, editor of the Beer Marketer's Insights trade publication. Because of its size — and control of nearly half the U.S. beer market — Anheuser-Busch could be a ripe target for cost-cutting.

"One theory is that their own cost reductions are winding down in Europe and Asia and around the world, and they need somewhere to sort of implement what they're best at," Steinman said.

InBev tried to allay those fears Wednesday, saying it would not close any Anheuser-Busch breweries and would make St. Louis the headquarters for its North American division. The company also said it would invite some Anheuser-Busch directors to join InBev's board.

Anheuser-Busch executives have made cost-cutting a goal over the last two years. Sales in the United States have been stagnant as consumers turn toward wine and cocktails, and the rising costs of ingredients have bitten into profit margins.

Last year, Anheuser-Busch turned a profit of $2.12 billion, up nearly 8 percent from $1.97 billion in 2006. But its core brands of Budweiser and Bud Light continued to lag as sales of craft beers and imports rose.

While the InBev deal looks sweet on paper, it's far from a sure thing. InBev said it plans to pay for the deal with $40 billion in debt, and raising so much capital could be tough as banks tighten their standards during a global credit crunch.

InBev's statement said the company has "strong support" from a number of financial institutions, including Barclays Capital, Deutsche Bank and JPMorgan. The company would pay for part of the deal by divesting some "noncore assets" along with equity financing.

Opposition to the deal is sure to be stiff in St. Louis. A new Web site called SaveAB.com offers visitors yard signs and bumper stickers to express their distaste for the purchase.

"Like baseball, apple pie and ice cold beer (wrapped in a red, white and blue label), Anheuser-Busch is an American original," the site says.

http://www.foxnews.com/story/0,2933,365823,00.html
 

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Discussion Starter #2
Do we need/want another foreign company buying up an American Institution?

I vote HELL NO!

Money in this case Ain't everything!
 

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Hunter, are you on the board of directors? Then your vote doesn't mean diddly squat :D Joking of course.

Unfortunately, American beer companies are being squeezed to death by Unions at this point. They can't buy enough glass bottles to put out their premium lines at the levels they want, so the price has gone up. Not only have the prices of wheat, barley and other beer making grains gone up, but as I mentioned, glass bottles are under a Union contract and about 3 months ago, there was a contract dispute. Construction companies are buying more soft metals, so all soft metals have gone up, so even aluminium prices have gone up. Putting beer in cups is becoming the mainstay for beer manufacturers. That means getting people to the pubs. There has been a lot of focus on pubs/beer gardens/bars because they can sell alot more beer to them in kegs at cheaper costs than they can shipping bottles that are going up in cost.

It may not be a matter of does AB want to sell, but rather can they afford not to sell. It's unfortunate.

Zhur
 

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Discussion Starter #4
Zhurdan:
Unfortuanatly I am not on the board of directors! :(

We live in some weird times at the moment and that we are on the outside looking in on a lot of these issues. It is very sad that AB even has to consider it.

So we wait and see what happens.
 

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It's not just AB that is feeling it. My brother works for a beer company in their supply division and they are feeling the same pinch. I'm feeling the same pinch everytime I go to buy a six-er, but then again, it's still tastes better than Shlitz or PBR. hehe

Zhur
 

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Discussion Starter #6
Anheuser-Busch to reject $46.3 billion InBev offer

Anheuser-Busch to reject $46.3 billion InBev offer

By Jessica Hall

PHILADELPHIA (Reuters) - Anheuser-Busch Cos Inc plans to reject InBev NV's unsolicited $46.3 billion takeover offer, saying it undervalues the company, a source familiar with the situation said on Wednesday.

Anheuser-Busch, the brewer of Budweiser beer, and InBev, the maker of Stella Artois and Beck's, could not be immediately reached for comment.

In rebuffing InBev's offer, Anheuser-Busch plans to map out its own restructuring plan soon that would include the sale of the company's theme park operations, The Wall Street Journal reported.

The plan also would include layoffs, more than $500 million in cost-cutting efforts and the sale of Anheuser-Busch's packaging unit, the New York Times added.

"It sounds dead-on. It's what we were expecting. The interesting thing is what happens next." said Tom Pirko, president of Bevmark, a Santa Barbara, California-based beverage industry consulting firm.

The timing of Anheuser-Busch's restructuring announcement was not clear, but the source said the company's board viewed InBev's $65-per-share offer as too low. The source declined to be identified by name because the source was not authorized to speak to the media.

Pirko said a rejection from Anheuser sets the stage for InBev to either raise its bid or take its bid directly to shareholders -- options he said InBev is likely to pursue.

Analysts had speculated InBev may have to raise its offer by more than $3 billion, to around $70 a share, to woo its shareholders into a deal to create the world's largest brewer, making a quarter of the world's beer.

InBev is prepared to take its bid directly to Anheuser-Busch shareholders through a tender offer, the Wall Street Journal said. InBev has yet to decide whether to pursue such a course, however.

"It would be surprising to think that Brito, with a bone already in his mouth, would take it out," said Pirko, referring to InBev Chief Executive Carlos Brito.

Anheuser-Busch has few takeover defenses to thwart a hostile offer, making it feasible for an unwanted suitor to acquire the company.

InBev on Wednesday prodded Anheuser-Busch by saying it remained available to discuss the bid, but stressed that time was "of the essence."

InBev said it had commitment letters for the financing for the deal and has paid $50 million in commitment fees to a 10-bank lending group.

It has been two weeks since the Belgian-Brazilian brewer launched its bid for Anheuser-Busch, but the maker of Budweiser and Michelob has yet to respond.

Analysts have said that if Anheuser puts off negotiations for too long, InBev may just take its offer directly to shareholders in a hostile bid.

That could be bad for Anheuser, analysts have said, since InBev's bid would give shareholders a significant premium that Anheuser would have trouble matching on its own.

The $65-a-share offer, which tops Anheuser's all-time high, is 24 percent higher than the stock's closing price the day before reports of merger talks surfaced, and 35 percent higher than the average share price over the preceding month.

Shares of Anheuser-Busch closed on Wednesday at $61.76, up 63 cents, or 1 percent, on the New York Stock Exchange.

BAD TIMING FOR THEME PARK SALE

Any reorganization is expected to include "scores" of layoffs, which could anger unions and local politicians in St. Louis, who had pressured Anheuser-Busch to reject the bid in an effort to save jobs, the New York Times reported.

If Anheuser-Busch tries to sell its 10 amusement, marine and water parks -- including SeaWorld and Busch Gardens -- that drew more than 22 million customers last year, it may find it difficult to find a buyer in the weak U.S. economy, analysts have said.

Busch Entertainment Corp, Anheuser's theme park unit, last year accounted for almost 8 percent of the company's sales and net income at $1.27 billion and $162.9 million, respectively.

Lehman Brothers valued Anheuser's theme park business at $2.9 billion. Historically, such assets have attracted bids topping 10 times cash flow, but the sputtering economy could weigh on any sale price and multiples may hover in the high single digits, analysts said.

Analysts and investors had expected the Anheuser-Busch to respond slowly as it explores a restructuring, or other options, which may include trying to buy out Mexican brewer Grupo Modelo. Anheuser owns 50.2 percent of Corona-brewer Modelo, but has no management control

Billionaire investor Warren Buffett, whose Berkshire Hathaway is Anheuser's second-largest shareholder, told CNBC on Wednesday that he viewed the beer battle as "an interesting spectator sport" but had not thrown his support behind either side.

Barclays Global Investors, the funds arm of British bank Barclays Plc, is the largest shareholder in Anheuser.

(Additional reporting by Martinne Geller in New York, editing by Richard Chang and Carol Bishopric)

http://www.reuters.com/article/newsOne/idUSN2545535020080626?pageNumber=1&virtualBrandChannel=0
 

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Personally - I have no problem with this. There is no national security issues, and foreign companies buy tons of stuff here. Its a shame, but that's the way it is.

Now, the Dubai parts deal, or the purchasing of tech companies by CHinese entities bothers me (tech companies that makes weapon parts). But this - I could care less.
 
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