SHADMIA'S WORLD

Just Another Guy with Opinions

Budweiser goes to Belgium

Posted by shadmia on July 16, 2008

Budweiser “The King of Beers” born in 1876 and one of the iconic American brands is no longer an American brand. It now belongs to a Belgian company. In a deal worth $52 billion, InBev, based in Leuven, Belgium, and run by a Brazilian management team, now owns the 130-year-old Anheuser-Busch founded by Eberhard Anheuser and Adolphus Busch. For an historical timeline and brief history of the company click here.

The deal, which amounts to $70 per share, was approved by the board of Anheuser-Busch but must still be approved by regulators and both companies’ shareholders. The deal, which is expected to be approved, would be the biggest in the industry and the third-largest ever foreign takeover of a US company.

It will make the new company, Anheuser-Busch InBev, the world’s third-largest consumer products company by market capitalization after Procter & Gamble of the United States and Nestle SA of Switzerland. It will easily become the world’s largest brewer, eclipsing SAB Miller, producing 12 billion gallons of beer per year. Anheuser’s home town of St. Louis, Missouri, will be the headquarters for the North American region and the global home of the flagship Budweiser brand.

InBev CEO Carlos Brito will be chief executive officer (click here for interview) of the combined company. The Board of Directors of the combined company will be comprised of the existing directors of the InBev Board, Anheuser-Busch President and CEO August Busch IV and one other current or former director from the Anheuser-Busch Board. Anheuser-Busch will become a wholly owned subsidiary of InBev. See the entire press release here.

Carlos Brito, CEO of InBev, said:

“We are very pleased to announce this historic transaction today, bringing together two great companies that share a rich history of brewing traditions. We are extremely excited about the opportunities that this combination will create for consumers worldwide, as well as our shareholders, employees, business partners and wholesalers. Together, Anheuser-Busch and InBev will be able to accomplish much more than each can on its own. We have been successful business partners for quite some time, and this is the natural next step for us in an increasingly competitive global environment. 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.”

August Busch IV, Anheuser-Busch President and CEO, stated:

“Today’s announcement brings new opportunities for Anheuser-Busch and its business, brands and employees. 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. We will leverage our collective strengths to create a truly diversified, global company to sustain long-term growth and profitability. In the United States and Canada, both InBev and Anheuser-Busch have seen significant benefits from our existing relationship and we look forward to replicating this success in other parts of the world.”

The sale of Anheuser-Busch has had mixed reactions, a nostalgic sense of loss coupled with a feeling of powerless resignation, among the American public:

“It’s a crime,” Billy Arr said, sitting in Bobby’s Idle Hour Lounge on Nashville’s Music Row on Monday, a cold Budweiser in one hand and a cigarette in the other. “I’ve been drinking this stuff since the 1960s, and this is hard to take,” said Arr, 65, a successful songwriter and artist whose compositions have been recorded by some of Nashville’s most famous performers. He continued “I just hate to see another American company bite the dust,” he said. “Soon there’s not going to be anything left that’s American. But I doubt they’ll change anything about the beer except for raising the price. I’ll keep drinking it for now, but if they take that American eagle off the label, then I’m out.”

“Bud’s the biggest brand here, and we don’t even have any imported beer in the house,” said Bobby’s owner, Dianne Herald, 58. “I know the Budweiser folks, and they’re good people. But I don’t like them selling out to foreigners.”

Standing in the parking lot inhaling the thick smell of malt, Dale Anderson of Iowa, who is in St. Louis to take the famous Budweiser brewery tour, will never forget the timing of his visit.

“I’m a third-generation Budweiser drinker, and ironically, it’s kind of a sad day, a bittersweet day,” he said. “But I’ll continue to drink it if they make the same product. … I just wish it could have stayed American.”

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