Saturday, October 18, 2008

A tangled web: Mexico says not so fast

Earlier this year, when American brewery Anheuser-Busch was vigorously opposed to a takeover by brewing conglomerate InBev, Auggie Busch IV would bluster —figuratively, if not literally— "No way, no how, no InBev."

We know now that his threats were mere bluster. Inbev purchased the company without any real resistance.

At the time, one of Anheuser-Busch's (A-B) proposed strategies was to double its shares of Mexico's Grupo Modelo from 50% to the entire thing. (Among other beers, Modelo produces Corona.) A 'poison pill', this purchase would have loaded A-B with more debt than InBev might have wanted to swallow.

So, Inbev threatened to sue, and A-B backed off.

Now that the sale of A-B to Inbev is all but done, Grupo Modelo is itself threatening to sue. It is asserting both that Mexican law prohibits the complete transfer of what can be perceived of as national assets and that its own stockholders have the right of first refusal.

On Thursday, the company, known for brands like Corona and Negra Modelo, said <...> the agreement [with Anheuser-Busch] means its own shareholders should first have the opportunity to buy the shares in Modelo and its subsidiary, Diblo, which would be transferred by Anheuser-Busch to InBev. Anheuser-Busch's roughly 50 percent stake in the company is non-controlling.

Grupo Modelo seeks to block Anheuser-Busch, InBev
By Emily Fredrix
AP Business
Oct 16, 2008

Disputing the merits of both claims, Anheuser-Busch replied that
it would "vigorously contest such claims," though it did not say how.

Of course, this may depend upon how vigorous A-B's definition of vigorous is.

Oh! what a tangled web we weave
When first we practise to deceive!
-- Marmion
Sir Walter Scott

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