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InBev buys Anheuser-Busch
InBev finally wooed Anheuser-Busch to be sweetened at a $52 billon takeover, but many questions remain especially for investors. Will the merger prove profitable for InBev or did they pay too much? The king of beers will wear a new European crown. InBev, a firm run largely by Brazilians has sweetened a $52 billion takeover to acquire Anheuser-Busch. This deal will create the world’s largest brewer and the fourth largest consumer product company under the name of Anheuser-Busch InBev. “This combination will create a stronger, more competitive global company with a unique worldwide brand selection and distribution network and with great potential for growth all over the world,” the CEO of InBev stated in a statement captured by the newspaper (Chicago Tribune, 2008).
Issues
InBev is best known for its Beck’s, Bass and Stella Artois brands distributed in the U.S by Anheuser-Busch. The new acquired company will be based in Belgium, though St. Louis plant will serve as its North American headquarters and the global home for the Budweiser brand. InBev has stated it does not plan to close Anheuser-Busch breweries and its chief executive has played down the notion of any big changes; however, white collar, middle and upper management position could also be cut to avoid duplication and trim expenses in St. Louis, which has been named the North American headquarters for the merged company (Chicago Tribune, 2008).
Faced with declining market share and pressure on profits the company we all know so well as the innovator for much of its existence somehow its culture has become risky within its industry. InBev in well known for its fierce cost cutting tactics. The firms’ struggles within the past years are changes in consumer tastes in the U.S. with buying more craft brews or imports and substituting spirits and wine for beer. Anheuser-Busch has also not been able to expand in the North American market successfully....