Budwesier to go Belgian?

There is no other beer as quintessentially American as Budweiser. With its red, white, and blue label, the beer is known around the world as the American brew. But, how would you feel if the "great American lager" was no longer owned by an American company?

Big time Belgian brewer InBev, which makes Stella, Becks, and many other brews, has offered to buy Anheuser-Busch's beer. Both Americans and Belgians are outraged by the possible takeover. Americans — who are putting up a fight at savebudweiser.com — don't want to lose the national symbol, and the Belgians don't want to be associated with it.

June 17, 2008
Dealbook
Chilling a Deal for Bud
By ANDREW ROSS SORKIN

They call him The Fourth.

As a child, he was a rambunctious little kid. As a teenager, he was a rebellious troublemaker, playing pranks and breaking his curfew. By college, his transgressions went well beyond youthful indiscretions: A woman he was with, a local waitress, was killed when his Corvette crashed at 6:30 in the morning. He fled the scene and was found with blood on him eight hours later. His close-knit family rallied around him, sent in high-powered lawyers, and the police dropped the investigation after evidence was misplaced.

Two years later, he was involved in a high-speed car chase with the police and was accused of trying to run over an officer with his Mercedes. Again, the family’s lawyers swooped in and he was acquitted.

When he graduated, he went to work for the family business. Now he is the chief executive.

The company? Anheuser-Busch, maker of Budweiser.

The Fourth is August Anheuser Busch IV, a descendant of Adolphus Busch, the founder of Anheuser-Busch. He just turned 44 on Sunday. He’s been running the company for about 19 months. Given his party-boy history — and, for that matter, given that he may have inherited his position more than earned it — it is perhaps not surprising that Anheuser-Busch is struggling, just as it has been for nearly a decade. Its more aggressive rivals, meanwhile, are growing at a rapid clip and becoming global.

So The Fourth is now on the receiving end of a $46.4 billion takeover bid from InBev, the Belgian-Brazilian maker of Stella Artois, Beck’s and Bass run by Carlos Brito, a tough-as-nails executive.

Mr. Brito’s offer of $65 a share in cash is a 35 percent premium over Anheuser-Busch’s 30-day average share price. And get this: The offer represents an 18 percent premium over the company’s record high of $54.97, a price Anheuser-Busch’s shareholders haven’t seen in six years.

What shareholder — one of whom is Warren E. Buffett — wouldn’t want to take the $65? They may not get the chance if The Fourth has anything to do with it. The company’s board has said it “will evaluate the proposal carefully” and will make a determination in “due course,” a view that Anheuser-Busch reiterated to me on Monday, refusing to comment further. They always say that.

Back in the real world, The Fourth, his father, August A. Busch III, and the board are already preparing to fight the offer, some people involved in the board’s deliberations said. (Other people tried to persuade me that they were all working in “good faith.”)

The Fourth told a meeting of beer distributors in Chicago in April, when rumors were swirling about the company’s ability to remain independent, that no sale would happen “on my watch.” Anheuser-Busch hired Goldman Sachs before the InBev bid was formally made, along with Citigroup, and both banks have been working overtime to build “fantasy” models that show the company is worth much more than InBev’s offer. They always do that, too.

Anheuser-Busch’s board is so stacked with Busch family members that some of its independent directors — which include Edward Whitacre Jr., the former chairman of AT&T — have privately explored the possibility of hiring their own lawyers to get independent legal advice, outside of Skadden, Arps, Slate, Meagher & Flom, which is representing the company, people involved in the talks said.

The board has historically been criticized for its governance: The Corporate Library gives Anheuser-Busch’s board a grade of D, citing, among other things, conflicts on the board. For example, the company paid $12.2 million to Enterprise Rent-A-Car — its chief executive, Andrew C. Taylor, is on the board.

And how much stock do the Busches own? Would you believe 4 percent — even less than Jerry Yang’s stake in Yahoo? Of course, some of the family’s reasons for wanting to hold onto the company have nothing to do with rewarding shareholders, and everything to do with holding onto a company around which their family identity revolves.

Already, family members and some members of management have been busily campaigning behind the scenes in St. Louis, where the company is based, to keep Anheuser-Busch from being taken over. They are trying to make the deal a political issue. Locally, it’s a hot topic.

Over the weekend, a mini-march took place before the Cardinals game against the Phillies with T-shirts and buttons calling to save Anheuser-Busch. A Web site, saveab.com, already has some 30,000 signatures, including those of the governor of Missouri and the mayor of St. Louis.

But before The Fourth and his family go too far, they should consider that their approach could backfire. Mr. Yang, the founder of Yahoo, learned the hard way just how far saying no gets you. He might lose his job because of the lengths he went to thwart Microsoft. The Bancrofts, which sold Dow Jones to Rupert Murdoch’s News Corporation under duress, also learned what saying no can mean: they didn’t get a dollar more than the original offer and embarrassed themselves in the process.

That is not to say The Fourth shouldn’t seek a higher offer. (The company will most likely say that its growth trajectory makes it worth more, and will question InBev’s financing.) But it does mean trying to reach a friendly deal as quickly as possible. Otherwise, the deal could turn into a months-long soap opera revealing just how dysfunctional the family can be.

(The Fourth and his father have long had a strained relationship. Other colorful characters in the family could emerge: Years ago, The Fourth’s cousin Peter accidentally killed his friend with a rifle in his home.)

One person involved in the talks said: “We all know how the story ends. It is just a matter of how we get there that could make this interesting.”

In the end, Anheuser-Busch’s defenses are weak. There’s no staggered board and shareholders can act by written consent — meaning they can oust the board at any time quite easily. But that’s not the real point. The Busches have done a miserable job of managing the company, and shareholders have suffered.

So rather than just say no, The Fourth should sit down with Mr. Brito of InBev. And bring a Bud.

The latest news on mergers and acquisitions can be found at nytimes.com/dealbook.

JaysonAych wrote:I think Miller is owned by a South African consortium. So non-American American beer is already a reality.

JaysonAych wrote:I think Miller is owned by a South African consortium. So non-American American beer is already a reality.

Ascona wrote:

JaysonAych wrote:I think Miller is owned by a South African consortium. So non-American American beer is already a reality.

i tought miller was canadian

xtine wrote:

Ascona wrote:

JaysonAych wrote:I think Miller is owned by a South African consortium. So non-American American beer is already a reality.

i tought miller was canadian

He was sold into slavery.

Swerve wrote:Why would Inbev offer such a high figure per share?