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Thursday, June 26, 2008

A-B vs. Interbrew: The battle is joined.

The Wall Street Journal reports today that the Anheuser-Busch's Board of Directors will reject the Brazilian-Belgian conglomerate's $46.35 billion acquisition tender. InBev, it is assumed, will then take the battle directly to A-B's stockholders.

Anheuser-Busch is the American brewer of the world's number one and two beer brands: Bud Light and Budweiser. Its anti-takeover strategy is assumed to be:

  • cost-cutting of $1 billion over the next 4 years.
  • selling its Busch Garden theme parks for $3 billion
  • purchasing the remaining 50% of Grupo Modelo SA for $10 billion
  • sell all of its packaging operations (!), that is, bottling, canning, and kegging.

Purchasing Modelo might make A-B too expensive for InBev. The attempt, in an attempt to keep Budweiser American, would be ironic:
Modelo also is a fiercely nationalistic [Mexican] company that wants to remain independent. And, relations between the brewers have been frosty at times over the years, mostly because Modelo executives felt Anheuser got half the company too cheaply.

Anheuser Girds for Fight With InBev
June 26, 2008

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