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Is InBev proposed takeover of A-B just history repeating itself?
Submitted by Patrick Orr on Wed, 07/09/2008 - 10:46am.
While it is hard for me to garner too much sympathy for American brewing titan Anheuser-Busch as they battle a hostile takeover bid from Belgian/Brazilian beer conglomerate InBev, the affront to my national pride is another matter.
No, I don’t want Brazilians or Belgians to control Anheuser-Busch, even if I never drink those beers anymore. It just isn’t right. It would be like George Steinbrenner selling the N.Y. Yankees to a group of Swiss bankers. My hatred for the Yankees just wouldn’t be so pure anymore and my faith in American hegemony would be shaken.
But as noted beer historian Maureen Ogle pointed out in a a really cool editorial piece for the Washington Post last weekend, the bold ambition of InBev and CEO Carlos Brito are just like the moves made by American brewing pioneers like Adolphus Busch and Frederick Pabst as they established their brands back in the day and battled to see who sell the best (and most) beer in the U.S.
Corporate takeovers, foreign ownership, and merger mania have been part of the American brewing landscape since for over a century. And just look at the recent SAB/Miller merger with Coors. Molson, Coors, and Miller brands are now all owned by the same foreign company.
That doesn’t really jibe with the image so many of us have in our minds of Laverne and Shirley working at a Milwaukee brewery, their fake factory standing in for Blatz or Schlitz or Miller or something like that.
So why does the proposed takeover of A-B bother us so? Because Anheuser-Busch is such an awesome American success story, of German immigrants coming to this country and creating this huge iconic company based on hard work, family loyalty, and — you guessed it, bold ambition.
Ogle also points out that it is strange to see A-B as the potential victim — they usually wear the black hat in the beer wars, like when they bought out Rolling Rock in 2006. From InBev. It really is a small world for these guys.
Meanwhile, the war between InBev and A-B is heating up, after the St. Louis brewing titan rejected InBev’s $46 billion takeover bid in June.
Just Monday, A-B filed a federal lawsuit against InBev, claiming they didn’t really have the solid financing to buy the company and were attempting to defraud A-B stockholders. The suit questions whether InBev has truly lined up the financing it would need to pay to acquire A-B, which amounts to $65 a share, according to the Associated Press.
This occurred hours after InBev filed a motion to replace A-B’s current board of directors.
Anheuser-Busch’s current board says InBev’s offer undervalues the company. InBev officials say the $65 a share price is far above the $50 a share that the stock was worth before rumors about InBev’s offer began to circulate. Anheuser-Busch’s stock rose 2 cents to close at $61.76 Tuesday.
Stay up to date on this story at the St. Louis Dispatch which has done some excellent work following this story.
And if you get a chance, pick up Ogle’s 2006 book “Ambitious Brew — The Story of American Beer” — a must read for beer enthusiasts, especially people who are interested in how companies like Anheuser-Busch, Miller, and Coors came to dominate the American beer industry. It was as much about business savvy, economics, and ambition as it was about brewing the best beer — although quality control was what allowed those companies to separate themselves from the pack in the first place.
I just finished reading the book (it was just released in paperback) and it is a very comprehensive history of the rise of A-B, Pabst, Schlitz, and others as the dominant brands of the 20th century. Ogle did a ton of work for the book and really knows her stuff.
I would have liked more on the rise of the craft beer movement in the late 70s and early 80s, although she does do a good job of relaying the stories of Anchor Steam’s Fritz Maytag, Sierra Nevada’s Ken Grossman, and the noble but too-ahead-of-its-time New Albion brewing company. But maybe she can write a sequel.
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I severely doubt that.
It's more of the same crap such as is befalling Yahoo...there is no real reason to acquire Yahoo and there is no good reason to acquire A-B either. Don't tell me about the dollar-euro exchange rate because it simply SUCKS businesswise.
Why did the Modelo guy split? Is it true what I heard about InBev's ownership of Cuban brewing interests and that it's not a legal situation? What about my suspicions that the European currency will take a nosedive soon? What is Russian oil interest are attacked along their pipeline networks and winter fuel is heavily curtailed I think European businesses are in danger of wading into waters they cannot swim in.
History Repeating Itself
For a different take on the A-B/InBev situation and the history behind it, I invite you to visit my blog, amymittelman.com/musings.html. I am the author of Brewing Battles: A History Of American Beer.
Sorry, but my national pride
Sorry, but my national pride has nothing to do with A-B or any other coporate American behemoth, including the NY Yankees. They are a monolithic company that produces an average to poor product.
It's BEER...
Farmers Supply Co-op here has 200 kinds.
I counter that it's for those who can't decide on 60 varieties and styles of CIGARETTE packaging/boxes and have to have that ONE choice!
PS CBS Early Show just reported the merger seems imminent.