What a difference $5 bucks a-share makes? Young Augie Busch IV vowed in April that any sale of Anheuser-Busch was not going to happen “on my watch.” Guess the 42-year-old corporate chieftain blinked.
Last week, the A-B CEO accused InBev of not having financing to back a $46B deal. He now apparently believes the Brazilians/Belgians can easily handle a $52B bid for America’s soon-to-be former crown jewel. The tall tale about a corporate merger violating the “Trading with the Enemy Act” (e.g., InBev has operations in Cuba) was just another whopper brewed by the geniuses in St. Louis.
A-B played a lousy PR game. Its former allies are left with egg on their face. Missouri’s Senators went all-out for A-B. They must be mighty miffed by the brewer’s money grab. Republican Kit Bond wrote a letter to Attorney General Mukasey in which he urged action to block an A-B deal to protect the interest of Missourians and the American economy. A-B, according to Bond, “has been an iconic symbol of the U.S. and our heritage.”
The “Show Me State’s” Claire McCaskill met with InBev CEO Carlos “The Jackal” Brito and told him to take a hike. She then implored A-B’s board to look beyond the “cold calculation of the bottom line.” McCaskill asked for steps to retain A-B’s independence and preserve its part of America’s heritage. The Democrat acknowledged fiduciary responsibility to shareholders, but had hoped the A-B board would unveil a plan to bolster shareholder value without selling the company’s soul to the Belgian/Brazilian combine.
Augie and the gang dashed those hopes. While they have been running image ads playing up Budweiser’s American heritage, the sell-out to InBev is now portrayed as an “industry transforming transaction.” New ads are expected to be rich in Samba and promote Budweiser as a good match with Belgian chocolates. The Clydesdales will be put out to pasture.
Augie will do just fine under new ownership. Brito has assured him that he can serve on InBev’s board, and keep an office in St. Louis, which becomes North American headquarters for Anheuser-Busch InBev.
As usual, it’s the workers who will take the hit. Dave Nicklaus, on today’s St. Louis Post-Dispatch blog, notes that A-B planned to generate $1B in cost-savings in its survival plan to derail InBev. Hard-nosed Carlos says $1.5B in savings are achievable following the combination. It’s easy to guess who won’t be lifting a glass to InBev’s acquisition of A-B.
The cold reality is that globalization made A-B a dead duck. Augie should have dropped the bit about defending America’s culture. That sure rings hollow following A-B’s acceptance of a sweetened bid from the Continentals.