Anheuser-Busch (BUD) plans to reject Belgian-Brazilian brewer InBev’s $65/share acquisition offer. This rebuff is expected for several reasons, including:
- The Busch family, in general, does not want to lose their family business
- A growing backlash in St. Louis and across America against the sale gives BUD leverage
- BUD has politicians on their side, such as Missouri’s Sen. Claire McCaskill and Gov. Matt Blunt
- And most importantly, if BUD ends up being sold, they want more money (and think they can get it)
Ironically, as part of the planned rejection, Anheuser-Busch released a restructuring plan that included $500 million in cost-cutting, massive firings, and selling off assets like theme parks. This is a typical response to an unwanted takeover, and begs the question why management didn’t implement such a plan before it was forced to. BUD’s supporters, moreover, were worried that InBev, a company known for slashing unnecessary costs, would go forward with a similar plan–so now those costs may be cut anyway.
What happens next? InBev could either raise their bid or take it directly to BUD’s shareholders. We expect the latter. There is room for InBev to increase, but likely not high enough to appease BUD management, which has yet to even engage in a dialogue. BUD’s shareholders, meanwhile, may feel differently.
Full BUD-InBev Coverage and Analysis
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