UPDATE 4-Anheuser-Busch sets out plan after rejecting InBev

(Adds details, August Busch quote, analyst, company comments; updates share activity)

By Brad Dorfman and Philip Blenkinsop

CHICAGO/BRUSSELS, June 27 (Reuters) - Anheuser-Busch Cos Inc (BUD.N: Quote, Profile, Research, Stock Buzz) on Friday laid out a plan to cut $1 billion in costs and improve earnings as it tries to convince investors that InBev NV's (INTB.BR: Quote, Profile, Research, Stock Buzz) $46.3 billion offer for the largest U.S. brewer was too low.

The program, which the company calls "Blue Ocean" was made even as InBev said on Friday it was mulling what steps to take next after Anheuser-Busch rejected its $65-a-share offer on Thursday.

The plan includes cutting 10 to 15 percent of its salaried workforce through early retirement and attrition, speeding up price hikes to cope with rising commodity costs, and setting earnings forecasts that exceed Wall Street's expectations.

The company also said it planned to repurchase a total of $7 billion in shares this year and next, up from its previous repurchase target of $3.8 billion.

"We believe we can create much more value than the $65 a share over the course of time, and we believe also that the $65 a share significantly undervalues the iconic brands that we have," August Busch IV, president and chief executive, told Reuters in an interview.

He declined to give a specific value for Anheuser's total value, but did say that its new 2009 earnings-per-share forecast of $3.90, multiplied by 18 times -- the stock's multiple before the InBev offer -- suggested a $70 value even before considering the double-digit earnings increases it projects after 2009.

The blueprint does not include selling the company's packaging unit or its SeaWorld and Busch Gardens theme parks -- two businesses that some analysts thought the company might divest in order to focus on its main brewing business.