STELLA ARTOIS GULPS DOWN BUDWEISER. A NEW BEER COLOSSAL IS BORN AFTER INBEV BUYS ANHEUSER-BUSCH FOR 70 DOLLARS PER SHARE

After long negotiations, American beer maker Anheuser-Busch has accepted Belgian beer maker Stella Artois’ offer to buy the company at 70 dollars per share. The new company will be called Anheuser-Busch InBev and will become the largest beer seller in the world. The total value of the operation amounts to 49.91 billion dollars and is the biggest transaction to take place since the subprime crisis hit.
With the agreement of this offer, a saga that endured for months has finally ended. After the initial offer of 65 dollars per share was refused, InBev continued to pursue Anheuser-Busch and finally conceded in negotiations by adding 5 dollars to its per share offer, bringing it up to 70 dollars.

With the agreement reached, regulators are expected to accept the takeover, which will mean an end to the 150 year old business of Anheuser-Busch, as well as the creation of the largest beer company in the world with annual sales equaling 36 billion dollars. The two groups together will control 300 brands of beer (Budweiser, Bud Light, Stella Artois, Beck’s, etc.). The terms of the agreement foresee that Anheuser-Busch (whose main shareholder is billionaire Warren Buffet with 5% of shares) will have two seats reserved on the directing board of the new company
For analysts, this agreement is proof that even in difficult financial times created under the recent credit crunch, and a slow down in international mergers and acquisitions, there are still some companies that cannot be stopped. And it is also evidence that banks, notwithstanding recent heavy losses, are still willing to open their doors to strong company takeovers or unions.

For InBev, however, this operation is not without risks: Anheuser-Busch’s largest market is the U.S. where growth has slowed and competition has grown. But since InBev made its proposal to buy, Anheuser-Busch shares have risen by 26%.



Beer: the protagonists on the world market

The world beer market, within which several mergers have occurred in recent years, is dominated by four main groups that, after the Anheuser-Busch and InBev merge, are now reduced to three. The operation is only the latest of many large scale manoeuvres occurring within the sector this year. The first half of 2008, in fact, was characterized by the acquisition of Scottish & Newcastle by Heineken and Carlsberg and by the agreement in the U.S. between SabMiller and Molson Coors.



InBev (Belgium): the sector’s world leader with earnings that reached 14.43 billion euros in 2007, with net earnings of 2.2 billion euros. In total, InBev sold 270.6 million hectoliters of beer in 2007. Among the brand names that lead the group are Stella Artois, Beck, Brama, and Skol.

SabMiller (Britain): the second largest producer in the world. Earnings in 2007 reached 21.4 billion dollars. The volume of beer sold was 216 million hectoliters, and the leading brand names are Miller, Peroni Nastro Azzurro, Grolsch, Pilsner Urquell.

Heineken (Holland): earnings for the third largest producers reached 12.5 billion euros in 2007, with a total of 119 million hectoliters of beer sold. Net earnings were 807 million euros, and the top names are Heineken, Amstel, Birra Moretti.
Anheuser-Busch (United States): total earnings in 2007 were 16.9 billion dollars, net earnings 2.11 billion dollars, for a total of 188 million hectoliters sold, top labels are Budweiser and Michelob.