Can InBev Take Over Anheuser-Busch? And Might Diageo and Heineken Become Players?
Okay, I lied. There is some information at hand that I think just can’t wait for me to get back this Sunday, so here I am posting when I should be packing for Montreal.
It’s a curse, it is, this drive to keep you guys up to speed.
Harry Schuhmacher’s Beer Business Daily, a Monday-Friday newsletter, is one of the beer industries greatest insider resources but a subscription is well beyond my meager financial resources. However, because I live right, or am just plain lucky, I have access to many of his most important news/opinion pieces because a subsriber sends this copyrighted information to me with Harry’s permission.
This, I admit, leaves me a bit uncertain how much of that information I can use, legally and morally. In two reports sent out today, Harry makes some points about the possible InBrev takeover of Anheuser-Busch and, after thinking it over, I figure I am within the boundaries to at least paraphrase them.
In the first, he notes that InBev would need to generate $1.4 billion of “cost savings and synergies” in a single year to make the deal work. That’s a mighty big number, that is. In the US it would mean massive cuttings, even in the mostly sacrosanct marketing budget. In fact, one doubting bank suggests they can’t do and that would result in a 22% earnings share cut in 2009.
There’s also the issue of Grupo Modelo, in whcih A-B has a 505 share; they’re debt-free and have a right to veto any takeover of A-B’s share.
In a second report, he says that both Diageo and Heineken might become suitors for A-B as well, noting that the latter could successfully push the (American) Budweiser brand all across Europe through its existing distribution network and that the two companies would complement one another well in the growing Russian and Chinese markets. In the U.S., of course, a merger between the would have major antitrust implications.
Lots there to chew on.
Thank you and good night.
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