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]
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Comments:
the company's market position in the United States, the most-profitable beer market in the world;
Dammit, lower the price, its a recession.
CEO: "Maybe we can save costs by diluting the beer with water. I don't think anyone will notice..."
Which reminds me. It's Miller Time.
So many people complain that AB makes crappy beer. That may be the case, but people buy it, so they must like it.
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.
@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!
Okay, I know I just defended Budweiser, but have tried their Chelada, and it tastes like Mexico puked in my mouth.
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."
"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.
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.
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.
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.
$10 says they'll sell off Busch Gardens
*Hopes they dont*
So instead of having AB workers pee in a can, they'll pee in a can then get laid off. Perfect!
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.
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.
@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.
@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.
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!
@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.
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.
@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.
@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".
@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.
@Bladefist: Alton Brown had an episode of Good Eats on making beer. Even for a teetotaler like myself it was quite fascinating.
@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.
@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).
@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. ;)
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 ;-)
@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.
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.
@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.
@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.
@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.
@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.
@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.
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!
@AtomicPlayboy: Don't give them any ideas man. Right now they are currently accepting applications for more wacko ideas.
![[www.mybeerpix.com]](http://www.mybeerpix.com/images/2007/07/chelada_256x600.jpg){kind=link}
Good for them. It may be crappy beer, but damn it, it's OUR crappy beer!