(Adds Busch comment, details on deal, assets)
By Philip Blenkinsop and Martinne Geller
BRUSSELS/NEW YORK, July 14 Anheuser-Busch Cos
Inc (BUD.N) accepted a sweetened $52 billion takeover bid from
Belgium-based InBev NV NV INTB.BR, creating the world's
largest beer maker and placing an iconic U.S. company into
Ending a month-long standoff, InBev, which makes Stella
Artois and Beck's, agreed to pay $70 per share in cash for the
maker of Budweiser, up from its original unsolicited bid of $65
per share, both companies said on Monday. The improved offer
marked a 27 percent premium to Anheuser's record-high stock
price in October 2002.
The deal, which InBev and analysts expect to gain
regulatory approval, would be the largest cash transaction in
history, according to research firm Dealogic and the second-
biggest ever foreign takeover of a U.S. company after
Vodafone Group Plc's (VOD.L) $60.3 billion acquisition of
AirTouch Communications in 1999, according to Thomson Reuters
The combined Anheuser-Busch InBev would have about $36.4
billion in annual net sales, with 40 percent coming from the
United States, and would brew about a quarter of the world's
InBev Chief Executive Carlos Brito will be CEO of the new
company, while Anheuser will get two seats on its board. One
will go to Anheuser CEO August Busch IV, who will have no
executive or managerial responsibilities, while the other has
yet to be named.
Brito told a conference call the beauty of the deal lay in
acquiring Anheuser's near 50 percent share of the U.S. market
and in taking its Budweiser brand global.
"It's all about complementarity and not overlap," he said.
Anheuser's home town of St. Louis, Missouri will be the
headquarters for the North American region. The companies said
all 12 of Anheuser's U.S. breweries would remain open.
FRIENDLY END TO MONTH-LONG BATTLE
The deal brings an amicable resolution to a month-long saga
that was becoming increasingly hostile as the companies traded
lawsuits and InBev set the stage to replace Anheuser's board.
"While the process was at times difficult for all parties,
in the end the right result occurred for everyone," Busch told
reporters on a conference call.
Anheuser shares were up 0.8 percent at $67.04 in midday
trading in New York, having surged 8.6 percent on Friday as
news of a higher offer and talks emerged. InBev was off 3.4
percent at 43 euros, following a 7.4 percent rise on Friday and
as a potential rights issue weighed on the stock.
"The synergies are better than expected, $70 is a
reasonable price and InBev has avoided a long drawn-out battle
in the courts," said KBC Securities analyst Wim Hoste in
The companies said the combination would yield cost
synergies of at least $1.5 billion annually by 2011, to be
phased in equally over three years.
InBev will finance its purchase with $45 billion in debt,
including $7 billion bridge financing for divestitures. It will
also issue $9.8 billion of new shares.
Chief Financial Officer Felipe Dutra said a rights issue
would be the 'natural way' to raise capital.
Morningstar analyst Ann Gilpin said completing a friendly
deal will help InBev down the road.
"Anheuser-Busch knows the U.S. market a lot better than
InBev, so InBev needs to retain key management from Anheuser
for marketing and distribution," she said.
To Gilpin, Anheuser shares were only worth $57 on a stand-
alone basis, but she said $70 was a fair price since InBev
would be able to cut costs and sell Budweiser and Bud Light --
the world's two top-selling beers -- overseas.
The transaction, due to be completed at the end of the
year, should have a neutral effect on normalized earnings per
share in 2009 and boost earnings from 2010, the companies
Another dimension to the deal was Mexico's No. 1 brewer
Grupo Modelo GMODELOC.MX, which is half-owned by Anheuser.
Brito said InBev was in talks with the maker of Corona and
believed the two companies could be "great partners." The talks
were taking a "positive" tone, he said.
After the merger, InBev will regain the top spot for world
brewing that it lost last year to SABMiller Plc SAB.L, which
was boosted by strong growth in China and the purchase of
It is also the latest mega deal in the fast consolidating
beer industry, that has recently seen Scottish & Newcastle
agree to be broken up by Carlsberg A/S (CARLb.CO) and Heineken
NV (HEIN.AS) and SABMiller and Molson Coors Brewing Co (TAP.N)
combine their U.S. operations.
Analysts believe SABMiller will now look at possible deals
with Mexico's Modelo or FEMSA, Foster's or Molson Coors.
InBev, known for fierce cost-cutting, must now deliver on
its financial promises, while dampening the concerns of workers
and politicians, including democratic presidential candidate
Barack Obama, who said it would be a shame if Bud were foreign
Brito tried to calm some concerns on Monday by saying
there were no plans yet to cut spending on marketing. The
company has said it would seek to unload non-core assets, but
declined to specify which. Analysts have said a likely
candidate was Anheuser's theme park business.
InBev was advised by Lazard Ltd (LAZ.N), JPMorgan Chase &
Co (JPM.N), Deutsche Bank AG (DBKGn.DE) and BNP Paribas SA(BNPP.PA), while Anheuser was advised by Goldman Sachs (GS.N) ,
Citigroup Global Capital Markets (C.N) and Moelis & Co.
(Additional reporting by Jessica Hall; Editing by David Holmes
and Sue Thomas)