Better Beer Blog

To many, Anheuser-Busch (A-B) is the epitome of the “evil empire”. They are the largest brewery in America, responsible for 48.8% of all beer sales. If a brewery starts to catch on, there’s a good chance A-B will buy them out (as they did with Latrobe last year). Imagine then my mild surprise when reports started surfacing of InBev’s offer to purchase A-B for $46 billion, or $65 a share. As big as A-B is, they are only number 4 world wide and InBev is numero dos.

The merger of the two companies would result in the largest brewery in the world, surpassing SABMiller as number one. How this will eventually shake down the beer industry remains to be seen. When looking at either company’s portfolio’s, the brands InBev carries seem to be more interesting to me simply because I haven’t had very many of them.

In an effort to hold off the merger, A-B has put an unsolicited offer of their own to take majority control of Mexico’s Grupo Modelo. Their offer of $550 million would give A-B 50.2% control of Grupo Modelo. It’s also amusing to me that A-B, or someone affiliated with them, has put up a Save A-B website. The rhetoric on the site is patriotic at best, propaganda at it’s worst. It is very amusing to see the “evil empire” taking on a “we’re the victims” sort of attitude. I don’t know what it is but no one ever roots for Goliath and I don’t mean to start now.

Normally I don’t write about beer industry politics like this. I work a corporate job in the day and talk of mergers and acquisitions doesn’t phase me at all. What all this business speak boils down to is money and the pursuit of more money. I don’t blame InBev at all for wanting to purchase A-B. I’m not a big fan of A-B’s products myself but it’s hard not to look at their 48% total U.S. beer sales and not want a piece of that. You don’t need a business degree to figure that one out.

I would like to think chances are good that should A-B get bought out by InBev, nothing would change for A-B. They’d still be making Budweiser, Bud Light and Natural Ice. The Clydesdales will still be on TV and we will continue to salute the “Real Men of Genius”. If anything, I would hope that some of InBev’s products would become more easily available. Nothing against BevMo but I would love to save a few gallons of gas by being able to pick up a sixer of Hoegaarden, Franziskaner or Spaten at the corner liquor store.

Should this deal go through, the only people to blame would be A-B’s shareholders as they’d be making $65/share on the deal and would have to approve the buyout. It’s all about the money. At the end of the day, I will voice my opinion and speak my voice through the power of my wallet. I will continue to purchase craft beers from local producers. Not because I’m all about the underdog but because I’m about the flavor.

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This entry was posted on Thursday, June 12th, 2008 at 9:32 pm and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.