InBev to make Bud its 'flagship'

INBEV, THE global brewer, yesterday launched a public effort to win support for its $46 billion (€29.8 billion) offer for Anheuser-Busch, the largest US brewer and owner of the Budweiser brand.

InBev told analysts and investors it would turn Budweiser into a "global flagship brand". It also pledged to keep the brand's headquarters in St Louis, where Anheuser was founded in the mid-19th century.

The company played down suggestions the deal would lead to US job losses, saying InBev would not close US breweries, which Carlos Brito, InBev chief executive, said were "highly efficient".

The bid comes against the background of continuing consolidation in the global beer industry.

SABMiller, which this year amalgamated its US business with Molson Coors, the third-largest US brewer, said it did not believe the deal would change the competitive landscape in the US.

InBev offered $65 a share for Anheuser, representing a 35 per cent premium over its 30-day average price. If the deal goes ahead, InBev, which owns Stella Artois and Beck's, would control a quarter of the world beer market.

Mr Brito stressed the mutual benefits of combining Anheuser's presence in the US, where it has more than 50 per cent of the market, with its presence in Latin America and Europe. Anheuser's international business is limited to Mexico and China.

Mr Brito said InBev would look at non-core asset sales, which are likely to include Anheuser's theme parks businesses, and which may be worth more than $3.5 billion.

Anheuser said it was reviewing the bid. Speculation that it might try to defend itself led to an 8 per cent rise in the share price of Grupo Modelo, the largest Mexican brewer, in which Anheuser holds a 50 per cent share.

A combination of Anheuser and Modelo would be more expensive for InBev to buy.

Grupo Modelo executives were in contact yesterday with Anheuser, following talks on Wednesday with InBev, according to sources close to the situation.

InBev said it would finance the deal with $40 billion in debt, which led to a rally in the price of its shares, which rose 6 per cent during afternoon trading in Europe. Shares in Anheuser rose 6 per cent to $61.86.

Mr Brito said a successful deal would lead to a cut in InBev's dividend over the next two to three years.