Friday 20 June 2008

The Economist on A-B/InBev

On June 11, European brewing giant InBev made an unsolicited offer to buy Anheuser-Busch:
As well as having a neat geographical fit, the two brewing giants would also enjoy better terms when negotiating over the price of hops, barley, glass and aluminium, which have been rising fast. Together they would be better placed to confront flagging sales in the developed world, thanks to a more extensive distribution network. And they would be able to hedge growing but volatile markets in developing countries against the steadier but slow-growing American market.
While the Busch family seems determined to hold off the takeover, they only control 4% of the company's stock. Salvation for A-B may come in the form of making its own offer for Mexican brewer Grupo Modelo, maker of Corona "that would make Anheuser too big for InBev to swallow."

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