Inbev Acquires Anheuser Busch

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InBev Acquires Anheuser Busch (AB) Why would rising commodity prices spark industry consolidation? Rising commodity prices usually means that there is a rise in demand for that particular commodity. Rise in demand can be of two types. Either there is a surge in the number of parties that want the same product, or there is a surge in the demand in volume. With Anheuser-Busch InBev coming together, then the demand in volume stays the same, or goes up, but the number of parties decreases. So this gives them a greater buying power in the market. Why would the annual cost savings not be realized until the end of the third year? Two main reasons why annual cost savings would not be realized until the end of the third year is first, mergers this size, take a substantially long time to actualize. Second, This was an all-cash buyout of $52 Billion. This would mean that the loan that was taken out by InBev needs to be repaid before a certain date. Most good businesses treat loan re-payment as one of the most important priorities. This is why Anheuser-Busch InBev paid the loan back before the expected date of repayment. Anheuser-Busch InBev would be making an annual revenue of $36 Billion, which still would leave the company with a little over 2 years for the break even point. What is a friendly takeover? Speculate as to why it may have turned hostile? A situation in which a target company's management and board of directors agree to a merger or acquisition by another company. In a friendly takeover, a public offer of stock or the acquiring firm makes cash, and the board of the target firm will publicly approve the buyout terms, which may yet be subject to shareholder or regulatory approval. This stands in contrast to a hostile takeover, where the company being acquired does not approve of the buyout and fights against the acquisition. There could be

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