This Bud's for Who? The Battle for Anheuser-Busch

Abstract

The Anheuser-Busch InBev case represents a major cross-border M&A transaction. Because the material covers a large, well-known transaction involving food and beverage companies, students can focus on both the strategic rationale behind the transaction as well as understand the various valuation issues associated with any M&A deal—including some specific to cross-border M&A, such as currency conversion of foreign sales. The material includes both student and instructor spreadsheets. Excerpt UVA-F-1717 Rev. Feb. 23, 2015 This Bud's for Who? The Battle for Anheuser-Busch August Busch IV, chief executive officer of Anheuser-Busch, sat at his desk in his St. Louis, Missouri, office, and considered the implications of InBev's hostile bid to buy his company. The Belgium-based InBev had recently displaced Anheuser-Busch to become the largest brewery in the world, and Carlos Brito, InBev's CEO, had made some early inquiries about buying Anheuser-Busch. After Busch IV rebuffed any idea of a merger of the two companies, Brito responded by making a public bid at $ 65 per share ($ 46.3 billion) on June 11, 2008. The Budweiser brand and the company's dominance of the U.S. market were second to none, but these facts were not reflected in the share price, which had been stagnant for several years. As Busch IV considered possible responses to the bid, he needed to determine a fair value for the company. What he really needed was time, but with the threat of a hostile takeover looming, it was one luxury he did not have. Although he wasn't quite sure how to fend off InBev and preserve his family's legacy, his first order of business was simple: right now, he could really use a Bud. Growth of a Beer Economy . . .