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Author: Subject: Anheiser Busch Buyout & MillerCoors update

True Peach





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  posted on 6/26/2008 at 01:16 PM
I fought these folks as a competitor working for our local beer distributor for 18 years. BUT I hate to see this happen. Bud is a strong publicly held company. These folks wanting to take them over will bleed these brands to death. Sales for a lot of Bud wholesalers have been down the past couple of years. Something this group of wholesalers are not used too. They are a competitive bunch. What does the future hold for all the sports advertising and sponsorships. There is a heck of a lot of money generated from these ventures. I am afraid the new owners will butcher the line item budgets and many things we take for granted will be gone.

You may see in the future AB dropping from the number one spot. They have a huge market share. The wholesaler I use to work for which is a Coors House, along with Corona, and other brands are almost 20,000 (15%+) cases up for the calender year to date.
That is pretty damn strong for the 4 county area they service.
That business is coming off somebody. Traditionally, increased sales come off your competitors. Sales for Coors Light is on fire, Corona, which is part of AB is soaring. Then you throw in all the other specialty crafted brews tells me there are a lot of brands out there that will be in position to catch AB's fallout.


I always wanted to see AB hurt in sales, but wanted it to come from competitors in the markets, not a foreign company. If this happens, you could possibly see brands like Natural Light and Michelob and other brands sold off. Its happened to other big brewers. (Stroh, Schlitz, Heileman, Pabst).







See Below

INDUSTRY NEWS


INBEV REAFFIRMS A-B BUYOUT OFFER, PAYS $50M IN COMMITMENT FEES TO LENDERS St. Louis Business Journal , June 25, 2008

InBev CEO Carlos Brito has sent another letter to Anheuser-Busch Cos.
Inc.'s board of directors reaffirming InBev's $46.3 billion takeover bid and informing A-B it has paid approximately $50 million in commitment fees to its lending group demonstrating its resolve to make a deal happen.

According to Brito's letter dated Wednesday, the company's lending group is comprised of Banco Santander, Bank of Tokyo-Mitsubishi, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING Bank, JP Morgan, Mizuho Corporate Bank and Royal Bank of Scotland.

Brito called the $65 per share offer a "firm proposal" saying the market reaction to the proposal has been "extremely positive."

The $65 per share price is a roughly 24 percent premium to Anheuser-Busch's closing price of $52.58 a share May 22 this year, the day before a Financial Times blog cited anonymous sources who said the Belgian brewer was preparing its bid for A-B. Anheuser-Busch shares were at $61.34 in mid-morning trading Wednesday, up almost 17 percent from May 22.

"We believe this confirms our view that our proposal is the best way to achieve this transformational combination for all constituents," Brito said in the letter.

The letter also reiterated previous plans made public by InBev, including making St. Louis the headquarters for the North American region, the global home of the flagship Budweiser brand, and retaining members of A-B's management group at all levels of seniority. Brito also said InBev would maintain a strong commitment to the St. Louis community.

"We remain available to discuss our proposal with you ... but we believe that time is of the essence," Brito said in the letter.

Craig Hutson, senior investment grade analyst at Gimme Credit, a corporate bond research firm, said Brito's letter ratchets up the pressure on A-B to make a decision.

"The longer (Anheuser-Busch) goes without engaging InBev's senior management, the more likely it becomes that InBev takes a hostile offer directly to (A-B) shareholders," Hutson said. "It has already been two weeks since the initial proposal, and it should not take 'several months'
for (A-B's) board to evaluate its merits. We do not believe (A-B) has many takeover defenses, and the 'just say no' response will elicit a flurry of shareholder lawsuits."

W. Randolph Baker, A-B's vice president and chief financial officer, issued the following statement: "It is our policy to not confirm, deny or speculate on rumors of potential investments, acquisitions, mergers, new business partnerships or other transactions."

St. Louis-based Anheuser-Busch Cos. Inc. (NYSE: BUD), through its Anheuser-Busch Inc. subsidiary, is the leading domestic brewer, holding a
48.5 percent share of U.S. beer sales. The company also manufactures and recycles aluminum cans and operates theme parks.


IS THREE A CHARM?
Beer Business Daily, June 25, 2008

InBev's Carlos Brito has sent a third letter to A-B chief August Busch IV earlier today. The letter reaffirmed its $65 cash offer and outlined InBev's usual argments for getting the deal done that have been well-vetted here and elsewhere. But more significantly, it said its financing was in order, which is new from the last letter. Says Brito: “To demonstrate our conviction in this combination, we have executed commitment letters for the financing and have paid approximately $50 million in commitment fees to a lending group...”

The letter also expressed “full support for Anheuser-Busch wholesalers and the three-tier distribution system.”

The letter stressed that “that time is of the essence.” Indeed, given the brewers allegedly circling Modelo, one analyst told BBD that “InBev should hurry. If they wait, ten things will happen and eleven of them are bad.”

The letter, while very similar to the two previous ones, is also significant because it shows that InBev is counting time in days, not weeks, between requests “to discuss our proposal with you.”
It is perhaps signalling the A-B board that a hostile bid is in the works, which would require a more definitive response from the brewer. Still, this letter is not a formal proposal, so A-B's board is not legally bound to respond.








[Edited on 7/16/2008 by rottinpeach]

 

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Peach Extraordinaire



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  posted on 6/26/2008 at 02:22 PM
I just hope the Clydesdales don't end up on some European's dinner table.

 

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  posted on 6/26/2008 at 02:35 PM

Maybe InBev will create a Busch beer with some flavor.

I still find it hard to believe that Budweiser actually ADVERTISES that they use rice in their recipe! In Germany, it can't even be sold as beer -- legally, beer must have only four ingredients: water, yeast, malt and hops.

 

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Extreme Peach



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  posted on 6/26/2008 at 02:41 PM
Fritz Maytag, owner/brewer of Anchor Steam beer (my personal favorite in the world) and the father of the craft brew movement, was once asked to compare the output of Anchor Brewing to A-B and he said, "Busch SPILLS more beer in a year than I brew".

 

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Peach Extraordinaire



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  posted on 6/26/2008 at 03:30 PM
One of the local brew masters here in Milwaukee named Randy Sprecher once told me Beechwood is the cheapest possible material to use for aging. Bud brags that up also.

 

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Universal Peach



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  posted on 6/26/2008 at 03:36 PM
regular Bud gives me a headache after the first drink. Bud light is ok but for some reason I cannot drink Regular Bud.

 

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  posted on 6/26/2008 at 04:05 PM
Hard to believe the big 3 U.S. brewers will all be foreign-owned though. Even if not the best tasting beer in the world, there's a time and a place for an ice cold tall-boy of Budweiser or Miller High Life.

 

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  posted on 6/26/2008 at 04:12 PM
I drink a lot of Bud and Bud Light. I never knew they used rice. Maybe that's why I'm getting so fat...from all the carbs in the rice!

The idea of foreigners owning Anheuser-Busch doesn't sit well with me. I may have to invest on Rogue Breweries. I love Dead Guy Ale.

 

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Extreme Peach



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  posted on 6/26/2008 at 05:37 PM
quote:
Hard to believe the big 3 U.S. brewers will all be foreign-owned though. Even if not the best tasting beer in the world, there's a time and a place for an ice cold tall-boy of Budweiser or Miller High Life.


You just came in after a couple of hours of yard work in August....or you helped your brother-in-law move to a new apartment in July...absolutely!

 

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  posted on 6/26/2008 at 05:41 PM
quote:
regular Bud gives me a headache after the first drink. Bud light is ok but for some reason I cannot drink Regular Bud.


i blame it on the beach wood, but i don't know if its true or not.

 

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  posted on 6/26/2008 at 05:49 PM
I know a lot of you are getting upset about AB being bought out by a foreign manufacter, but it could be a good thing, as Europeans know how to make a good beer. In the long run it might be a good thing, if beer quality takes a step up. American beers suck when compaired to their European comterparts. And Belgians know how to make good beers.
 

Zen Peach



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  posted on 6/26/2008 at 05:49 PM
quote:
quote:
regular Bud gives me a headache after the first drink. Bud light is ok but for some reason I cannot drink Regular Bud.
i blame it on the beach wood, but i don't know if its true or not.
Beach wood? You mean they go out on the beach and pick up whatever wood is laying around and brew beer with it??

 

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  posted on 6/26/2008 at 05:57 PM
Now wait a minute, you drink the bud? Hmmmn. I never tried it that way. So you drink the bud? Huh, who would have thought? Learn something new everyday! I always thought you "drank" it out of a "mug".
 

Zen Peach



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  posted on 6/26/2008 at 05:57 PM
Drift wood....beach wood.

Six of one, half dozen of the other.

After the first three or four, most beers taste the same anyway.

My first beer always tastes like......more...

 

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  posted on 6/26/2008 at 06:30 PM
A/B bought out Magic Hat earlier this year so guess those folks are use to takeovers.

 

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  posted on 6/26/2008 at 09:38 PM
A Budweiser is like a McDonald's hamburger to me. Not my first choice, but will work in a pinch. Another American company goes global.

Next thing you know, some Japaneze will be buying Harley Davidson.

 

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Zen Peach



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  posted on 6/26/2008 at 09:49 PM
I have never liked Budweiser.

It gives me a headache, even if I only have a couple.

Bud Light isn't bad if that's all there is(concert venue, etc), beats the hell out of Coors Light.


I'll stick to fine Canadian spring water.




[Edited on 6/27/2008 by PhotoRon286]

 

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Zen Peach



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  posted on 6/26/2008 at 10:06 PM
quote:
Next thing you know, some Japaneze will be buying Harley Davidson.
The HELL you say!!!!


 

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  posted on 6/26/2008 at 10:13 PM
quote:
quote:
Next thing you know, some Japaneze will be buying Harley Davidson.
The HELL you say!!!!





would it be any different from the time AMC took them over?

A-B Board of Directors rejected the buy-out...

the Dutch are going to court....

http://www.bizjournals.com/atlanta/stories/2008/06/23/daily96.html

no word on what Obama has to say on this matter........

 

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True Peach



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  posted on 6/26/2008 at 10:14 PM
Bud doesn't go down without a fight (nyuk, nyuk, nyuk)...

Anheuser-Busch rejects InBev bid, calls it too low
By Christopher Leonard, AP Business Writer | June 26, 2008

ST. LOUIS --Anheuser-Busch's board is unanimously rejecting a Belgian-Brazilian brewer's takeover bid, saying the $46 billion offer undervalues the Budweiser maker.

The St. Louis brewer calls InBev's $65-a-share price "financially inadequate" and not in the best interests of its shareholders.

Chairman Patrick Stokes says the proposal "significantly undervalues the unique assets and prospects of Anheuser-Busch" and doesn't reflect the strength of the company's iconic brands.

The move may still not keep Anheuser-Busch Cos. from being sold. The company will likely face intense shareholder pressure to seek a higher price or take other actions to bolster its share price, and InBev has filed suit seeking a judgment to confirm that Anheuser-Busch's shareholders can remove without cause the company's board of directors.


[Edited on 6/27/2008 by gondicar]

 

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Zen Peach



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  posted on 6/26/2008 at 10:27 PM
quote:
quote:
quote:
Next thing you know, some Japaneze will be buying Harley Davidson.
The HELL you say!!!!



would it be any different from the time AMC took them over?

A-B Board of Directors rejected the buy-out...

the Dutch are going to court....

http://www.bizjournals.com/atlanta/stories/2008/06/23/daily96.html

no word on what Obama has to say on this matter........


You mean AMF....that was American Machine and Foundry.

Harley Davidson....ALWAYS American owned and operated.

 

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True Peach



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  posted on 6/27/2008 at 11:15 AM
quote:
I know a lot of you are getting upset about AB being bought out by a foreign manufacter, but it could be a good thing, as Europeans know how to make a good beer. In the long run it might be a good thing, if beer quality takes a step up. American beers suck when compaired to their European comterparts. And Belgians know how to make good beers.




I doubt you will ever see any formula changes in the existing brands. Maybe packaging. I think the changes you will see will be LESS advertising and sponsorships. Inbev makes some damn good beers. Becks, Stella Artois, Brahma, and Hoogarden to mention a few. It could give some opportunities for Bud Wholesalers to distribute some new future brands.

But what is really sad about it, is that it being foreign owned. When it is one of Americas most recognize companies. I don't really care that much for AB, but hate to see a possibility of their headquarters moving overseas. Kind of like some folks in China buying Walmart. Hey, I hate Walmart. But the only good thing IMO is that its American owned/Based.

 

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  posted on 6/27/2008 at 11:33 AM
its not gonna effect me i like the hard stufff

 

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  posted on 6/27/2008 at 12:35 PM
Here's August Busch IV's reply to the InBev corporation:

June 26, 2008

Mr. Carlos Brito
Chief Executive Officer
InBev nv/sa
Brouwerijplein 1
3000 Leuven
Belgium

Dear Carlos,

This is to provide you with a response from the Anheuser-Busch board of
directors to your unsolicited and non-binding proposal submitted June 11th.
First, let me express our appreciation for your public comments about your
high regard for Anheuser-Busch, its employees, leadership and wholesalers,
remarking on the success of our company in building iconic brands and the
independence of its board of directors.

We have noted that your letter is expressly not an offer, but only a
non-binding proposal. Notwithstanding the non-binding nature of your
proposal, the Anheuser-Busch board carefully and thoroughly examined all
aspects of your proposal with the assistance of independent advisers.

The board unanimously concluded your proposal is inadequate and not in the
best interests of Anheuser-Busch shareholders. In reaching this conclusion,
the board considered the advice of its independent financial advisers.

The Anheuser-Busch board believes that your proposed price substantially
undervalues Anheuser-Busch, its key assets and its prospects, among them:

-- Premier, iconic brands - Anheuser-Busch has built coveted, highly
valued brands over the past 150 years. Budweiser and Bud Light are
among the top 10 global consumer brands and are supported by valuable
marketing properties. Bud Light is the largest-selling beer brand in
the world and Budweiser is the second-largest. These brands have
strong consumer loyalty. Recent change of control acquisitions of other
major consumer product companies with iconic brands have been valued at
much higher multiples than what you have proposed for Anheuser-Busch
shareholders.

-- Market leader position - The strength of these brands and the close
relationship the company has with its wholesalers have made
Anheuser-Busch the U.S. market leader with almost 50 percent share in
the world's most-profitable beer market. In sheer size, the United
States is the world's second-largest beer market and continues to grow.

-- Growing international partners - Anheuser-Busch has large, strategic
investments in two international brewers in important growth markets.
We hold a 50 percent direct and indirect interest in Grupo Modelo, the
leading brewer in Mexico, another very profitable beer market. Modelo
also has a strong, growing business in the United States. We hold a
27 percent interest in Tsingtao, the leading premium beer and one of
the largest brewers in China, which is the largest and fastest-growing
beer market in the world.

-- Global brand business - Budweiser is a leading global brand, sold in 80
countries around the world, and is the largest-selling beer in Canada.
Budweiser is the leading international brand in China, the world's
largest and fastest-growing beer market. We own our Budweiser brewery
in India and recently entered Vietnam. We see strong growth for
Budweiser in Mexico, Argentina, Paraguay and other Latin American
markets.

-- Accelerated Earnings Growth - Our company already has developed a
detailed, accelerated earnings growth plan that 1.) expands our cost
initiative through an enhanced productivity plan that we refer to as
the Blue Ocean effort to deliver more than $750 million in savings
through 2009 and $1 billion in savings through 2010, while furthering
environmental sustainability; 2.) extends the strong revenue growth
from our brands that we've seen over the past five years; and
3.) drives additional volume growth for core brands through new
consumer opportunities and for our successful, higher-margin new
products.


Anheuser-Busch's beer brand building expertise is an asset without
comparison. Our brands sell in countries around the world and are sought by
consumers everywhere. Our award-winning advertising, U.S. and global
sponsorships and superior-quality image are second to none.

As you state in your letter, there is limited overlap in our respective
businesses. Many of the suggested synergies seem not to be synergies at all,
but are instead profit enhancements. We believe that we can deliver similar
enhancements to our shareholders independent of a transaction, and have
included these enhancements in our accelerated earnings growth plan.

From your standpoint, we see that now could be opportunistic timing for
you to make this acquisition, given the weak U.S. dollar and sluggish U.S.
stock market. From the standpoint of the Anheuser-Busch shareholder, however,
a transaction with InBev at this time would mean foregoing the greater value
obtainable from Anheuser-Busch's strategic growth plan. We are convinced that
pursuing our program will enable Anheuser-Busch shareholders, rather than
InBev shareholders, to realize the inherent value of Anheuser-Busch.

While Anheuser-Busch pursues its plan, its board will continue to consider
any strategic alternative that would be in the best interests of
Anheuser-Busch shareholders. The board is open to consider any proposal that
would provide full and certain value to Anheuser-Busch shareholders.

Our two companies know each other well and have a close dialogue and
relationship. This has developed over the years through our joint agreements
in the United States, Canada and South Korea and through our exploration of
other joint business deals. As you say yourself, you dream big. We respect
your desires to grow your company. But your growth should not come at the
expense of our stockholders.

Very truly yours,

August A. Busch IV

cc: Board of Directors of InBev nv/sa

 

True Peach



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  posted on 6/30/2008 at 01:03 PM
Nice....lets hope the shareholders hang with Augie...................
 
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