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Bud Board Backs Busch by Blockheadedly Blackballing Belgian Brazilians

by: Felix Salmon June 26, 2008 | about stocks: BUD / INBVF.PK    
Felix Salmon

Felix Salmon

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Disappointingly, but unsurprisingly, Anheuser-Busch will reject InBev's takeover bid. Will they do so by promising shareholders much more value as an independent company? It's hard to see how they could do that while maintaining a straight face. Will they wave the patriotic flag and say they're protecting jobs in the heartland? No, that doesn't seem likely either:

In its effort to justify rejecting InBev's $65 a share bid, Anheuser-Busch is expected to announce a massive reorganization to boost profits that includes cutting more than $500 million in costs...

The reorganization may anger some locals and politicians in St. Louis who had been pressing Anheuser-Busch to reject the bid, in part, to save local jobs. The reorganization is expected to include scores of job cuts.

I'm not sure what "scores of job cuts" means, but even before it's officially announced there's quite obviously nothing compelling about the alternative being mooted by the Anheuser-Busch board. By forcing InBev to go hostile, all they will achieve is a lot of unhelpful fighting on the way to an inevitable conclusion. Sad.

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This article has 4 comments:

  •  
    Jun 26 10:14 AM
    Bud is doing the right thing for it's share holders, by share holders I do not mean the share holders that jumped on board to make a quick buck . Everyone agrees that this is at best a short term gain and for the most part the end of Budweiser. So as a share holder who has owned shares for many years in Bud , I look to the future , I would like to continue to get my dividends , when the market is unstable Bud has always been a good solid SAFE place to put your money and get a return. Why would you want to do away with that. Bud will be changed either way, I say bring it on if Brito wants But make him fight for it , but he needs to remember the backlash of the fight also if he fails it could be the end of InBev. He will lose a good part of the US market with the bad taste of a hostile takeover .

    So Brito this Bud's not for you .......
    Reply
  •  
    Jun 26 10:20 AM
    So Mr. Salmon, You are in disagreement with, and are therefore more knowledgable on the future of the brewing industry than some of the following business minds that comprise the A-B board???

    CEO James Forese, Former Ambassador and Congressman James Jones, William Porter Payne, Joyce M. Roche, Former chairmen of the Joint Chiefs of Staff Henry H. Shelton, CEO of Enterprise Rent-A-Car Andrew Taylor, Former Chairmen and CEO of JP Morgan - Douglas A. Warner III, and former AT&T CEO Edward Whitacre Jr.

    Just curious, as you are obviously smarter than these individuals, what boards do you reside over???
    Reply
  •  
    Jun 26 12:52 PM
    obviously you havent been studying ABs new product line or even their older lines as far as market share growth here in the USA.. Sure cost cutting measures will need to be taken to get the stock prices up in the near future to apease the big financial stock holders, however the future of this company under AUG IV looks very good to me, more aggressive than his father, his knowledge of the global markets is far supperior.I think you will see AB purchasing global market share instead of trying to build their own brewerys overseas, which was August III idea,,
    The 4th understands the changes in beer drinkers taste ( bud light lime is a huge hit) the new Michelobe brand which is now being marketed will take away from the micro brew crowd once they taste these superior brews. IMHO the future looks very bright for AB also historically under slow growth times as we now have beer consumption will rise, not only here but globally.
    Ive been a share holder for years and AB has been a steady, solid stock to have.
    INBEV would destroy the brand if it succedes in its hostile take over.
    I also question their $40 billion loan on an $46 bil purchase,,sounds to me like taking on HUGE debt that would not be sustainable unless AB is taken apart piece by piece. Maybe its blockheaded thinking to you but to the board this is also what they must consider.
    Reply
  •  
    Jun 26 11:32 PM
    AB, an American company, has been great to me and my family for over 40 years,,My dad was a brewer as am I..Although I might not be a major shareholder like Mr. Buffet,, I have given 23 years of blood, sweat and tears as my dad before me with 22 years..I can't tell you how prould I am to work for such a fine company..Mr. Salmon,,other than yard work,,have you ever done a hard days work??? Have you ever bulit anything that you could be prould of?? To show your kid's or famliy?? We have..St Louis is not the only brewery,, there are 12 of us with communities and familys that AB helps take care of,,We are a family and we will fight to keep it that way.. I back Mr Busch to keep what we have,,Have American's become so greedy that they are willing to make a quick buck rather than support one of the few larger American born companies. What about all the support that AB has given our troops. Will Inbev show their support the same.....No they won't since they are not American.
    Reply
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