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InBev agrees to buy Anheuser for $50 billion

(Agencies)
Updated: 2008-07-14 14:57

PHILADELPHIA/NEW YORK - US brewer Anheuser-Busch Cos Inc (BUD.N) accepted a sweetened $50 billion takeover bid from Belgium-based InBev NV (INTB.BR), creating the world's largest beer maker.

Bud Light and Budweiser beer is shown in a cooler at the Toluca Mart liquor store in Los Angeles, California June 16, 2008. [Agencies]

InBev, which makes Stella Artois and Beck's, agreed to pay $70 per share for the maker of Budweiser, up from its original unsolicited bid of $65 per share, both companies said on Monday. The sweetened offer marked a 27 percent premium to Anheuser's record-high stock price in October 2002.

Related readings:  Bud brewer bids to slow down InBev's board plans  InBev wants to axe firm's board  Anheuser may reject InBev offer  Trouble brewing in Busch family over InBev's bid

This deal, which is widely expected to gain regulatory approval, would be the largest in the industry and the third-largest ever foreign takeover of a US company.

The combined company will have about $36.4 billion in annual net sales and brew about a quarter of the world's beer.

The beer industry is undergoing a wave of consolidation, with Scottish & Newcastle (SCTN.L) agreeing to be broken up by Carlsberg A/S (CARLb.CO) and Heineken NV (HEIN.AS), and SABMiller Plc (SAB.L) and Molson Coors Brewing Co (TAP.N) agreeing to merge their US operations.

Based on Anheuser's 713 million shares outstanding as of March 31, the deal values the company at $50 billion. The companies pegged the price tag of the deal at $52 billion, but did not elaborate on what that value reflected.

InBev's Chief Executive Carlos Brito will be CEO of the combined company, which will be called Anheuser-Busch InBev. Anheuser will get two seats on the new company's board.

In this June 11, 2008 file photo, a display along one of the buildings in the Anheuser-Busch brewery complex shows Clydesdales pulling a hitch of Budweiser products in St. Louis, Mo. Anheuser-Busch reportedly has agreed to be acquired by Belgian brewer InBev for $49.9 billion. The deal being reported by The Wall Street Journal would create the world's largest brewer and put the iconic American beer maker in the hands of the Belgian-based company behind Stella Artois and Beck's beers. [Agencies]

Anheuser's home town of St. Louis, Missouri, will be the headquarters for the North American region and the global home of the flagship Budweiser brand. The companies said all of Anheuser US breweries would remain open.

The deal brings an amicable resolution to a month-long saga that was becoming increasingly hostile as the companies traded lawsuits and InBev set the stage to replace Anheuser's board.

InBev had proposed its own slate of nominees for the board of directors that included Adolphus Busch IV, an uncle of Anheuser-Busch's current chief executive.

Shares of InBev and Anheuser surged on Friday as news of the higher offer and the negotiations emerged. Anheuser closed up 8.6 percent at $66.50 and InBev closed up more than 7 percent.

Sources said the two companies and their advisers had talked in New York over the weekend, working through details such as the name for the combined company, roles for Anheuser's executives and the structure of the board. The breakup fees if the deal collapses also were discussed over the weekend, the sources said.

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