Anheuser-Busch Rejects Foreign Takeover Bid

Anheuser-Busch says that is going to fight a takeover bid by Belgian brewer InBev by cutting staff and finding savings of over $1 billion, the St. Louis-based brewer announced today. They also plan to increase profits and repurchase stock.

From CNNMoney:

“The Anheuser management is trying to say they are going to do everything that InBev’s management would do,” said Morningstar analyst Ann Gilpin. Gilpin raised questions on why Anheuser didn’t lay out its latest proposal prior to the InBev bid. “Either you low-balled it or you are really stretching it,” she said.

Anheuser is going to find it hard to convince shareholders that they are better off accepting the strategic plan, over InBev’s cash offer she said. “I think shareholders would rather take cash,” she said

Here’s A-B’s official statement:

“InBev’s proposal significantly undervalues the unique assets and prospects of Anheuser Busch,” said Patrick Stokes, chairman of the board for the company. “The proposed price does not reflect the strength of Anheuser-Busch’s global, iconic brands Bud Light and Budweiser, the top two selling beer brands in the world, with Budweiser selling in more than 80 countries today. The proposal also undervalues the earnings growth actions that the company had already planned, which have significant potential for shareholder value creation; the company’s market position in the United States, the most-profitable beer market in the world; and the high value of its existing strategic investments.”

Our recent reader poll shows that the majority of our readers don’t really care if InBev takes over A-B, but there are groups who certainly seem to.

UPDATE: Anheuser To Cut Costs, Challenge InBev On Directors
[CNNMoney]
Anheuser-Busch Rejects InBev Proposal as Financially Inadequate, Not in Best Interests of Shareholders [A-B]

Comments

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  1. ideagirl says:

    Good for them. It may be crappy beer, but damn it, it’s OUR crappy beer!

  2. Bladefist says:

    the company’s market position in the United States, the most-profitable beer market in the world;

    Dammit, lower the price, its a recession.

  3. MeOhMy says:

    CEO: “Maybe we can save costs by diluting the beer with water. I don’t think anyone will notice…”

  4. 44 in a Row says:

    Which reminds me. It’s Miller Time.

  5. Daemon_of_Waffle says:

    So many people complain that AB makes crappy beer. That may be the case, but people buy it, so they must like it.

  6. Bladefist says:

    @44 in a Row: I just puked a little in my mouth.

  7. failurate says:

    It’s not even crappy beer. In the kingdom of beer there are many styles. The American Lager/Light Lager is a style. They happen to make the most popular beer of the most popular style.
    When it comes to quality/consistency of product, few companies can match Anheuser Busch.

    The people calling Budweiser swill are just flat out wrong and have fooled themselves into thinking that it makes them cool/connoisseurs.

  8. DeepFriar says:

    Phew! We were this close to losing Chelada!!

    [www.mybeerpix.com]

  9. shorty63136 says:

    @failurate: HERE HERE! I second that. (If you can’t tell where I’m from, check out the zip in the name)

    This takeover would be something TERRIBLE for the St. Louis Metro area. There have been an exodus of both recent college graduates AND corporate headquarters from the St. Louis area. AB and Express Scripts (#36 on Fortune 500) are pretty much the only ones left there, I think. I’m pretty sure Hardees hauled ass.

    Another major employer like this leaving/ceasing to be locally owned could be devastating to the local economy. Look at what happened to the Post Dispatch.

    I’ve been PRAYING this would not go through.

    And while I’m not a fan of beer (in general, regardless of the brand), AB’s other products have suited me well on MANY a keg night, thankyouverymuch.

    VIVA LE BUSCH!

  10. failurate says:

    Okay, I know I just defended Budweiser, but have tried their Chelada, and it tastes like Mexico puked in my mouth.

  11. MeOhMy says:

    @failurate:

    When it comes to quality/consistency of product, few companies can match Anheuser Busch.

    Totally anecdotal but I knew someone taking a class with a professor who did a study on the fierce brand loyalty among alcoholics. One of the participants told the professor that he drank Busch because it was the only beer he knew of that if you opened one late at night before realizing it was last your beer, you could put it back in the fridge – opened – and it would taste the same when you came back to it in the morning! :-D

    Budweiser *IS* swill, though. Nothing gives me a headache faster. Miller Lite or Genny are my usual “lawnmower beers.”

  12. shorty63136 says:

    “Budweiser *IS* swill, though.”

    Again. Totally anecdotal. But your opinion is well-respected. To each his or her own beer and opinion.

    Also depends on where you live. I’m more likely to drink a Bud Light in St. Louis than I am in Atlanta (where I am now). It tastes better b/c it’s been off the line for usually less than a week. Fresh beer just tastes better.

  13. parad0x360 says:

    They could always try to raise profits by selling more beer. of course in order to do that they would need to stop using urine instead of water but hey…whatever it takes.

  14. gliscameria says:

    What a giant load of SH1T!

    “cutting staff and finding savings of over $1 billion”

    Translation: Fire some people, take their healthcare and pension.

    Yes, its better to make a few rich stockholers happy at the expense of thousands of employees. For being a ‘christian’ nation we sure missed the mark on the whole Greed thing.

    These are the people that are ruining the country.

  15. failurate says:

    I’m not an alcoholic or brand loyal. My preferred beer is Guinness. I’m also a homebrewer.
    If you want to learn about beer and beers, read anything written by Charles Papazian.

  16. HIV 2 Elway says:

    @Daemon_of_Waffle: Do you comment on espn.com?

  17. Bladefist says:

    @failurate: Cheers, I’m a homebrewer as well.

  18. theblackdog says:

    $10 says they’ll sell off Busch Gardens

    *Hopes they dont*

  19. Trai_Dep says:

    So instead of having AB workers pee in a can, they’ll pee in a can then get laid off. Perfect!

  20. @ideagirl:

    Yep

  21. I just got back from Europe and…no surprise, most people over there just drink their version of the same stuff (but they call it Moretti, Stella Artois, Carling, Foster’s, or Heineken).

    News flash: 90% of the people in the world just like something light, sweet, and refreshing.

  22. Chairman-Meow says:

    Oh great…Budweiser is watered-down enough already without making it worse. I’m sure the boardroom is working as we speak on new & innovative ways to to turn their beer into Beer-Flavored Water.

  23. yasth says:

    @gliscameria: This isn’t about making stockholders happy this is a bunch of executives throwing employees under the train out of fear for their own jobs.

    They are going to get sued for this bit of stupidity too. Stockholders like cash, and rejecting a takeover bid with a bunch of jingo crap doesn’t say much about their ability to make it work.

  24. Daemon_of_Waffle says:

    @HIV 2 Elway: Don’t think so. Is there beer in the end zone?

  25. Wormfather is Wormfather says:

    @Bladefist: And right into mine. I think we just discovered the recipie.

  26. Wormfather is Wormfather says:

    @Bladefist: I’ve been thinking about starting that. I heard that some people brew it in 5 gallon drums.

    Pst. Meg, Ben, we’d love an article about saving money on beer by making it yourself, just saying…I forgot how to use google, I just end up at wikipedia.

  27. stupidjerk says:

    AB: So…InBev…if you owned Anheuser, what would you do to fix things around here?

    InBev: Well, here is an outline of our plan…

    AB: Thanks suckers…deals off, let’s roll boys!

  28. Bladefist says:

    @Wormfather is Wormfather: It’s really easy to do. I make it in 5 gallon increments. For my first time, I did a 10 gallon batch and I’m putting half in a 5 gallon keg, half in bottles.

    As far as saving money….eeeee…The ROI on home brewing would take a while to make up. You would need 200~ in equipment, and the ingredients are only slightly cheaper then comparable commercial beer.

    Unless you factor in its very fun, very rewarding, then you have a good ROI.

  29. battra92 says:

    I actually heard speculation part of the reason Washington was so up in arms about this was that AB gives HUGE amounts of lobbyist money to BOTH parties.

    I guess they’re afraid we’ll reinstate the Eighteenth Amendment.

  30. Bladefist says:

    @battra92:

    [www.vpap.org]

    Mostly Democrats. But not by much.

  31. Bladefist says:

    @battra92:
    Better look:
    [www.vpap.org]

  32. Norcross says:

    @theblackdog: that’s part of their cost cutting plan, along with outsourcing their packaging.

    as a recovering alcoholic, I could really care less, but being that (a) my wife’s uncle is an engineer for them [had nothing to do with that Chelada garbage], and (b) St. Louis would be hit HARD if they left.

  33. johnva says:

    @Bladefist: That’s only for Virginia. Here is a more comprehensive national look. Also, in your Virginia data, it looks like they recently shifted significantly to Democrats. This is a common pattern among corporate lobbying – give more money to the party in power.

  34. drjayphd says:

    @Ash78: Pretty much. The first time I sipped Carling, I wondered if it was Danish for “Bud Light”.

    Now that I looked ‘em up, I see I’m wrong. It’s Canuckistani for “Bud Light”.

  35. Bladefist says:

    @johnva: Nice catch. My bad for not looking closer.

    I don’t think campaign contributions mean corruption. So that wasn’t an attack on democrats.

    give more money to the party in power.

    I fully agree. Which is why you will see stories of Republicans getting money drift off and Democrats money corruptions come into the spot light. Circle of life.

  36. battra92 says:

    @Bladefist: Alton Brown had an episode of Good Eats on making beer. Even for a teetotaler like myself it was quite fascinating.

  37. Bladefist says:

    @battra92: Teetotaler?! Why man why? Beer is amazing. I don’t drink hard liquor, or wine. But I cant get the beer down fast enough.

  38. johnva says:

    @Bladefist: Still, that seems like pretty significant levels of campaign money from AB, if Virginia is typical of other states. My numbers were only for federal candidates and PACs, so it would seem that in this time period since 1990 they’ve spent at least $60 million+ just on campaign contributions (which wouldn’t even count money spent directly on lobbyists).

  39. drjayphd says:

    @Bladefist: Eh, what can you do to stop it? Whoever’s in power is going to be in the pockets of so many corporations that anything vaguely pro-consumer’s going to be watered down to the point of uselessness. Politics is really turning into (or at least becoming more obvious about being) the cheering-for-laundry for people that hate sports.

    If that makes any sense… which it probably doesn’t. ;)

  40. mikelotus says:

    AB is a poorly ran company that has allowed itself to get in this position. Their job is to act in the shareholders best interest, why is Bladefist not foaming at the mouth on this, since the shareholders own the company, not the managers. This is the very attitude that allows CEO’s to get salaries they don’t deserve instead of the firing they do deserve. Yes, its tough on the employees, but the Belgium company has said they are willing to locate their HQ to AB in St. Louis. Remember, the CEO of AB is a spoiled brat who has gotten out of 2 DWIs that caused injuries to other. They have also been buying up craft breweries like Dominion here in Virginia since that type of beer is gaining, not losing, market share. This is a poorly ran company that neither serves its employees or shareholders well. Its server the upper management, so get off your high horses and understand what is going on here. They will lose this, just as the WSJ did to Murdoch.

    Besides, Belgium has quit a few Clydesdale horses that will help lower the cost of AB beer production ;-)

  41. failurate says:

    @Bladefist: I bought a turkey fryer for my next batch. If I can get my hands on a cheap second fridge, will start doing the kegging thing. Have friends that keg, their beer almost always tastes better.

  42. LmaoTseTung says:

    @failurate:

    So you read books about beers, then don’t try them and stick to what’s safe or easily available (Guinness). It’s just Chipotle to Bud’s McDonalds.

  43. Bladefist says:

    @mikelotus: Why the cheap shot?

  44. Bladefist says:

    @failurate: I got a brand new, stainless steel kegerator on craigslist for $200 bux. It holds 2 kegs. So I can have a homebrew chillin and a commercial beer.

  45. LmaoTseTung says:

    @Ash78:

    Newsflash: That’s the cheapest stuff.

    No one’s saying that you have bad taste in booze if you don’t run around with Chimay or soemthing. I drink a ton of malt liquor but I’m not about to run to King Cobra’s aid when someone on a messageboard says it tastes like someone pissed in a vat of chemicals.

  46. mikelotus says:

    @Bladefist: It wasn’t that cheap was it? Besides you drink beer, no need for a shot glass. I am surprised you did not mention that this is capitalism at its worse, though something that seems to be actually OK with Republicans now (see Bush appointees to head SEC), where the managers of the companies can continue to shaft the owners (i.e., shareholders) of the company. This is not for AB’s management to decide except which course provides the best value to the owners of the company.

  47. Bladefist says:

    @mikelotus: eh. Didn’t really think about it. It was a beer article, I was focusing on the beer. I’ll save the capitalism for another article.

  48. Bladefist says:

    @mikelotus: Actually you’re right. It wasn’t really a beer article. But still, I hear the word beer, and my mind goes to a better place.

  49. @Bladefist:

    the company’s market position in the United States, the most-profitable beer market in the world;

    Most profitable?? During this time of economic woe??? Somebody needs to slap a windfall profits tax on Big Hops, who are obviously taking unfair advantage of this nation’s addiction to beer. And then we can string up the ghastly speculators who have brought us $10/12-pack beer! To arms!

  50. Bladefist says:

    @AtomicPlayboy: Don’t give them any ideas man. Right now they are currently accepting applications for more wacko ideas.

    [gizmodo.com]

  51. johnva says:

    @Bladefist: What’s so crazy about the asteroid thing?

  52. RandomHookup says:

    I get a laugh when I go to Europe and see people pay extra for a Bud (can’t use the Budweiser name they “borrowed”) because it’s an “import”.

  53. nequam says:

    @failurate: The best comment on any post I’ve read today.

    Besides, I have no problem with brand loyalty. Budweiser is a great American brand and has lasted, so they must be doing something right.

    In the interest of full disclosure, however, I do not drink Budweiser (unless somebody hands me one). I prefer small(er) regional breweries — I’m in New England. I drink a lot of Harpoon. And I have to say that I think the Bud commercials (with the David Puddy stunt-double) are absurd when he says of Bud: “In a lighter beer, you can’t mask imperfections like you can in a dark, heavier beer.” Hidden imperfections? Like what, a floating mouse head??

  54. Bladefist says:

    @nequam: Well he is kinda right. I would revise his statement to say:

    Lighter beers are much easier to screw up. You can screw up a heavy beer and just put a different label on it. If you screw up a light beer, it taste like arm pit.

  55. donkeyjote says:

    @Bladefist: But…. ALL beer tastes like arm pit….

  56. jdmba says:

    Hey, no one blamed the victim yet!

  57. Mr. Gunn says:

    Oh, I’m so sad for McCain’s wife.

  58. battra92 says:

    @Bladefist: Part Baptist/Methodist upbringing, part I just can’t stand the smell of it.

    I get my kicks on Diet Pepsi Max though. ;)

  59. cerbie says:

    A buyout like that is a risk of being publicly traded. Don’t want it? Do what you need to go back to being private.

    Looks like they still want it to be public, and are willing to screw over their employees for it. Surely that inspires loyalty, don’t it?

    @jdmba: damn those employees! OK, I did it.

  60. rdldr1 says:

    I’d like to keep AB American. However, Im a Miller fan and live in a Miller-dominated city.

  61. failurate says:

    @LmaoTseTung: I’ve tried enough beers to know what I like.

    If you live in the Chicago, Milwaukee, Madison area, here is a cool event for beer lovers.

    [www.greatlakesbrewfest.com]

  62. RayDelMundo says:

    If a buyout favorably helps the value of my Bud stock, I’m all for it.

    I hear Bud is switching to plywood aging to cut costs.

  63. katworthy says:

    Anheuser Busch will be cutting staff to work to reject the bid. Ha!

    “Firing people to save America!”

  64. Bladefist says:

    @battra92: I can respect that. I love beer. Don’t love being drunk. If I could drink and not get drunk, that would be fantastic.

    I’m catholic though, it’s kind of my religious duty to drink. Just trying to do my part.