Anheuser must find solution palatable for all
Written on June 11, 2008
As a foreign suitor circles Anheuser-Busch, the brewer of the iconic King of Beers must craft a strategy that goes down smoothly for shareholders, employees and its hometown of St. Louis.
Anheuser-Busch Cos Inc (BUD.N: Quote, Profile, Research), the largest U.S. brewer and maker of Budweiser and Michelob, is being eyed for a $46 billion takeover by rival InBev NV (INTB.BR: Quote, Profile, Research), according to sources familiar with the situation.
Anheuser and Belgium-based InBev, which makes Stella Artois and Becks, have repeatedly declined to comment. But the chief executive of Modelo (GMODELOC.MX: Quote, Profile, Research), which is half-owned by Anheuser, told Reuters last week he was unaware of any merger talks. Modelo CEO Carlos Fernandez sits on Anheuser’s board.
Media reports have said the Busch family — particularly CEO August Busch IV and his father, who is a board member and a prior CEO — oppose a takeover.
“I think August A. Busch IV is cast in the mold of his father and grandfather, that making beer is the family business,” said Terry Ganey, an editor for the Columbia Daily Tribune in Missouri who co-wrote a book about the Busch dynasty online payday advance. “I think if the decision were just kept within that core family, they would want to keep doing it their way.”
Ganey recalled a quote often repeated by the forefathers of the company: “Beer-making is the child we love most.”
But in the generations since Adolphus Busch married Lilly Anheuser in 1861 and began working at her father’s brewery, the Busch clan’s stake in the company has shrunk to about 4 percent, not enough to veto a deal. Yet their influence on the board is said to be strong.
The managers of InBev, formed by the merger of Belgium’s Interbrew with Brazil’s AmBev, are known for aggressive cost-cutting, which they would likely institute at Anheuser.
Filed in: economics.