In exchange for a hefty potential price, Inbev has finally lured Anheuser-Busch
While I still think that A-B's management hasn't welcomed Inbev's courtship, the planets seem to be aligning for a deal to be consummated. By upping its offer, Inbev has increased the premium paid to Anheuser-Busch shareholders to more than 33%, compared to the closing price before news of Inbev's offer was leaked. Perhaps more importantly, InBev also made Anheuser-Busch's management team and board look as though they are earning their keep. After all, what board in their right mind would have accepted the first offer?
A negotiated sale certainly seems to be in the best interest of everyone involved at this point. The legal wrangling from both sides had already begun; Inbev has been trying to force a shareholder vote aimed at replacing the current board with a highly pro-Inbev slate. Anheuser-Busch, meanwhile, has questioned the veracity of Inbev's statements regarding the availability of financing for the deal, and pointed out that Inbev owns a Cuban brewer, which they claim would be a legal issue, given the American trade embargo levied against the country.
Just a few days ago, it seemed that these legal issues could drag the process out for weeks. That could make a hostile bid by Inbev costly to both firms, in terms of managerial attention, general uncertainty regarding each company's future, and the legal expenses themselves. A-B's facing particularly difficult challenges at present, as Molson Coors
If a deal will be consummated (and I think it will), I bet it'll happen quickly. The A-B board can say that they held out for a better price -- anything above $70 will make them look particularly good -- and Inbev will gain a big leg up on their competition with SABMiller to be the true international king of beers. By negotiating, the A-B board will also continue to have some voice in the structuring of the deal, the treatment of its employees, and any potential asset sales.
A fascinating sideline player in the deal so far has been Warren Buffett, who controls about 5% of Anheuser-Busch through Berkshire Hathaway
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