BRUSSELS (Reuters) - Belgium-based brewer InBev NV and Anheuser-Busch Cos Inc have agreed a friendly deal to create the world’s biggest brewer, the two said on Monday .
This is a chronology of the events leading to the talks:
May 23, 2008 - Market speculation over several months concerning a deal between InBev and Anheuser-Busch comes to a head with a detailed report from on-line site FT Alphaville. The report details a $65 a share bid, financing arrangements and names bankers and lawyers working on a $46 billion deal.
June 11, 2008 - InBev’s first letter to Anheuser. This outlines a $65 a share cash bid, valuing Anheuser at $46.3 billion. InBev says the bid price represents a 35 percent premium over Anheuser’s 30-day average share price prior to recent market speculation.
InBev says the deal will be financed with at least $40 billion in debt, arranged by eight banks, and a combination of non-core asset sales and equity financing.
Anheuser says it “will evaluate the proposal carefully”.
June 15, 2008 - InBev’s second letter to Anheuser. InBev urges Anheuser to consider its bid rather than look at a deal with Mexican brewer Modelo, in which Anheuser has a 50.2 percent stake, as suggested in some media reports.
June 25, 2008 - InBev’s third letter to Anheuser. InBev says “time is of the essence” as it seeks talks with Anheuser over its bid. InBev says it has paid around $50 million in fees to get committed financing from an expanded group of 10 banks.
June 26, 2008 - Anheuser rejects InBev’s bid calling it “financially inadequate” and not in the best interests of its shareholders. Anheuser says it will deliver more than $750 million of annual savings in 2009 and $1 billion in 2010. Earlier, InBev said it had filed a lawsuit in the Delaware Chancery Court seeking to confirm that Anheuser’s shareholders can remove without cause all of Anheuser’s 13 board members.
June 27, 2008 - Anheuser outlines plans to boost its earnings by cutting jobs and raising prices, and also raises its share buyback to $7 billion in 2008 and 2009 combined from a previous figure of $3.8 billion.
July 1, 2008 - InBev says it is committed to $65 a share bid and its preference is still for a friendly combination. InBev says it is clear eight Anheuser directors elected after 2006 are subject to removal and the purpose of its filing with the Delaware Chancery Court is to establish whether five directors elected in 2006 could also be replaced. Anheuser says it will challenge InBev’s claim that its shareholders could remove the board.
July 7, 2008 - InBev files a preliminary proposal with the U.S. Securities and Exchange Commission to replace Anheuser’s board of directors.
July 8, 2008 - Anheuser sues InBev over making “false and misleading statements” regarding the financing of its bid for Anheuser in a move seen as an attempt to slow InBev’s move to replace the U.S. brewer’s board of directors.
July 11, 2008 - InBev and Anheuser have started talks on a friendly merger, a source familiar with the situation said. The Wall Street Journal reported InBev has raised its bid by $5 to $70 a share in an effort to seal a friendly bid. The Anheuser board is likely to accept the sweetened offer over the weekend, the paper added, citing a person familiar with the matter.
July 14, 2008 - The two brewers say they have agreed to combine to form Anheuser-Busch InBev with Budweiser as its flagship brand.
Anheuser-Busch shareholders will receive $70 per share in cash, for an aggregate equity value of $52 billion, the two say.
The transaction is to yield synergies of at least $1.5 billion annually by 2011, be neutral to earnings per share in 2009 and accretive from 2010.
Reporting by David Jones and Philip Blenkinsop; Editing by Jason Neely and Erica Billingham