Belgian brewer InBev is offering a big payday to shareholders of Anheuser-Busch Cos Inc, but its bid to create the world’s largest beer company is already facing a major obstacle — US election-year politics.
InBev SA, whose brands include Beck’s and Stella Artois, offered an unsolicited all-cash bid of US$65 a share for Anheuser-Busch, which makes Budweiser, Michelob and Bud Light.
That’s well above the St Louis-based company’s closing share price of US$58.35 on Wednesday.
But politicians and activists are already lining up against the deal, saying it could cost jobs in the US and send ownership of an iconic US company overseas. With economic concerns at the front of voters’ minds, the opposition could cause a headache for InBev.
Missouri’s Republican Governor Matt Blunt said on Wednesday he opposed 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.
Web sites have sprung up opposing the deal on patriotic grounds, arguing that such an iconic US firm shouldn’t be handed over to foreign ownership. One of the sites, called SaveAB.com, was launched by Blunt’s former chief of staff, Ed Martin.
“Shareholders should resist choosing dollars over American jobs,” Martin said in a statement on Wednesday night. “Selling out to the Belgians is not worth it — because this is about more than beer: It’s about our jobs and our nation.”
If the deal goes through, it would create a beer-brewing giant and mark just the latest phase of consolidation in an industry facing rising ingredient costs and stale demand in the US.
“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 firm could not comment beyond the statement.
InBev chief executive Carlos Brito said the deal would boost both companies, giving InBev access to the US 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 US and grown the iconic Budweiser brand. Together, we would draw on the collective expertise of both companies’ management and employees,” Brito said.
Shares of Anheuser-Busch soared 7.6 percent to US$62.80 after regular trading 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 about the potential offer.
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 US 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 on Wednesday by 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 has made cost-cutting a goal over the last two years. Sales in the US 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 made a profit of US$2.12 billion, up nearly 8 percent from US$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 US$40 billion in debt, and raising so much capital could be tough as banks tighten their standards during a global credit crunch.
The CIA has a message for Chinese government officials worried about their place in Chinese President Xi Jinping’s (習近平) government: Come work with us. The agency released two Mandarin-language videos on social media on Thursday inviting disgruntled officials to contact the CIA. The recruitment videos posted on YouTube and X racked up more than 5 million views combined in their first day. The outreach comes as CIA Director John Ratcliffe has vowed to boost the agency’s use of intelligence from human sources and its focus on China, which has recently targeted US officials with its own espionage operations. The videos are “aimed at
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
US Indo-Pacific Commander Admiral Samuel Paparo on Friday expressed concern over the rate at which China is diversifying its military exercises, the Financial Times (FT) reported on Saturday. “The rates of change on the depth and breadth of their exercises is the one non-linear effect that I’ve seen in the last year that wakes me up at night or keeps me up at night,” Paparo was quoted by FT as saying while attending the annual Sedona Forum at the McCain Institute in Arizona. Paparo also expressed concern over the speed with which China was expanding its military. While the US
SHIFT: Taiwan’s better-than-expected first-quarter GDP and signs of weakness in the US have driven global capital back to emerging markets, the central bank head said The central bank yesterday blamed market speculation for the steep rise in the local currency, and urged exporters and financial institutions to stay calm and stop panic sell-offs to avoid hurting their own profitability. The nation’s top monetary policymaker said that it would step in, if necessary, to maintain order and stability in the foreign exchange market. The remarks came as the NT dollar yesterday closed up NT$0.919 to NT$30.145 against the US dollar in Taipei trading, after rising as high as NT$29.59 in intraday trading. The local currency has surged 5.85 percent against the greenback over the past two sessions, central
RSS