InBev completes Anheuser Busch acquisition

19 November 2008

Belgium's InBev has completed its $52 billion acquisition of the maker of the iconic Budweiser beer, Anheuser-Busch, after Anheuser-Busch's shareholders approved the merger and it overcame the last hurdle of China's regulatory authorities, thereby ending 156 years of Anheuser Busch's existence in St Louis.

About 96 per cent of Anheuser-Busch's shareholders voted for the deal last week while shareholders of InBev's had already agreed to the acquisition in September.

The deal is now the largest completed acquisition this year and the new entity will be named Anheuser-Busch InBev, making it an approx $100 billion conglomerate and the largest producer and seller of beer, brewing one-fourth of the world's beer.

The acquisition has withstood the global financial turmoil that saw proposed mergers and acquisitions falling apart globally due to adverse market conditions and severe liquidity crunch. It was a smooth sailing for InBev because the deal had its moments of uncertainty and perhaps would not have gone through but for the Fort Knox type of agreements it signed with Anheuser and its consortium of 23 bankers.

In May, InBev not only shook the world of spirits but also the financial market when it made an unsolicited bid for Anheuser-Busch for $46 billion at a time when credit crisis was brewing globally. (See: World's largest brewer InBev proposes to create $100 billion company with $46 billion takeover of Anheuser-Busch)

The board of the St Louis-based brewer rejected the unsolicited offer as it viewed the $65-per-share offer too low, (See: Anheuser-Busch may reject $46.3 billion InBev bid) and tried to cut a deal with its Mexican partner, Grupo Modelo, and even plotted its own restructuring plan, that included the sale of its theme park operations and packaging unit as also layoffs in order save $500 million in cost as also to scuttle InBev's bid.