Belgian hegemony ensnares the King of Beers
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Posted to Business on Tue Jul 15, 2008 at 02:07:45 PM EST (promoted by port1080). RSS.
Belgian brewer InBev became the largest in the world with its $52B takeover of American beer king Anheuser-Busch.
The deal is expected to close by the end of the year, and analysts expect very little opposition from shareholders or regulatory agencies in either country. InBev noted that since the companies do not compete directly now that it is likely all of Anheuser-Busch's breweries and infrastructure will remain open under the direction of the new leadership.
The combined company is expected to be so large that it will be able to negotiate low rates for all its supplies, including utilities, simply due to its sheer mass. The expected annual sales for the new company would be almost double InBev's current income, and it is expected to control almost one fifth of the total beer produced worldwide. As part of the deal, current CEO August Busch IV, the great-great-grandson of the company founder would get a "non-executive job" and a seat on the new Board of Directors.
Executives at Modelo Beer (The Mexican company that produces Corona) are considering their response, which may include invoking contract language that allows them to repurchase the 50% share of their company currently held by Anheuser or to block the merger.
On the American side the sale is being met with outrage, although most experts believe it will subside once people forget. However, lawmakers are already blaming the takeover on the weak US dollar and bemoaning the sale of another famous American corporation to Foreigners.
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