Dear August, This Bid’s For You …

Belgian beer brewer InBev has offered a proposal to Anheuser-Busch Inc. to combine the two companies and form a massive global brewer.

A-B acknowledged receipt of the unsolicited proposal and said its board of directors would evaluate it carefully and “pursue the course of action that is in the best interest of Anheuser-Busch’s stockholders.”

InBev is seeking to acquire all outstanding common shares of A-B for $65 per share, which amounts to a $43.6 billion cash offer to the St. Louis, Mo.-based A-B, Bloomberg reported.

The combination of the two companies would create a Goliath in the beer industry, and it would be one of the top five consumer product companies in the world.

As part of the proposal, InBev wants to make St. Louis, Mo. the headquarters for the North American region and the global home of the flagship Budweiser brand. InBev has also proposed to name the combined company to evoke Anheuser-Busch’s heritage.

InBev said it would invite a number of Anheuser-Busch’s directors to join the board of the combined company and would seek to retain key members of Anheuser-Busch’s management team across the organization.

Given the limited geographical overlap between the two businesses and the efficiency of A-B’s footprint in the U.S., InBev would maintain all of Anheuser-Busch’s U.S. breweries.InBev said it sees significant opportunities to internationalize A-B’s key brands and would position Budweiser as the combined company’s flagship brand, leveraging InBev’s expansive internationalfootprint. The two companies already have a U.S. distribution partnership for InBev’s European premium import brands, including Stella Artois, Beck’s and Bass. In a letter to A-B President and CEO August A. Busch IV – entitled “Proposal for Combination Creating the World’s Leading Beer Company” – InBev CEO Carlos Brito wrote:

Dear August,

Over the past several years we have met with you on many occasions to explore ways in which we could deepen the relationship between our two great companies. Jorge Paulo Lemann and Marcel Telles greatly appreciated your taking the time to meet with them on the 2nd of June in Tampa. During the course of that meeting you asked whether we had a formal proposal to make to you and your Board of Directors regarding a potential combination.

Although we did not put forward a specific proposal at the time, I am now writing to provide you with proposed terms. As discussed on the 2nd of June, we believe that the combination of Anheuser-Busch and InBev would be an industry-transforming event, creating an unparalleled opportunity for our two companies’ consumers, wholesalers, employees, business partners, investors and the communities they serve. Our successful collaboration in Canada, Korea and, more recently, the United States, gives us confidence that, together, we can achieve more for our various stakeholders than would be possible apart.

We believe that the best way to achieve this transformational combination for all constituents, including Anheuser-Busch’s shareholders, is an all-cash acquisition of Anheuser-Busch by InBev.

The letter continues on to outline the various benefits and terms of the proposal, and later adds:

We would like to arrange a meeting promptly with you and your representatives to discuss all aspects of our proposal and answer any questions you may have. Now is the time to make this compelling combination a reality. Our Board, our majority stockholder and our management team are committed to making this happen.


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