The Budweiser/Miller Merger

[webfact]

The Budweiser/Miller Merger
BY JACOB MASLOW



The Budweiser and Miller merger is set to change the beer industry forever. The respective companies, Anheuser-Busch InBey and SABMiller will be joined into one company. Initial reports had the acquisition listed at $104 billion-$106 billion.

An acquisition of this magnitude will be under immense scrutiny by several governments.

If the merger is allowed, the two companies will combine for revenue of $64 billion a year. The United States is one of the markets where the biggest scrutiny will occur due to the size of the companies. It’s expected that the company will dominate several different markets worldwide.

Both companies have been in talks for weeks with a deadline that was set on Wednesday, October 14th as the final, formal offer allowed under British takeover rules. If the companies had not agreed on a sale price by this time, they would have had to wait another six months before engaging in talks.

Many of the biggest shareholders from both companies have been in talks for weeks. 3G Capital, an investment firm that helped form Anheuser, was in discussion with the Santo Domingo family which holds a large share of 14% SABMiller. The family also is an investor in 3G Capital.

3G was tasked with the job of negotiating with other shareholders of SABMiller. The company is said to have negotiated with Altria, which holds a 27% share of the company. Once all of the major shareholders were on board, they agreed to a sale price of £43.5 a share.

Full story: http://www.streetwisejournal.com/the-budweisermiller-merger/11800/


-- StreetWiseJournal 2015-10-23

[Usernames]

Tastes terrible!

Less cost!

[khwaibah]

Bud stinks and I'm a Yank.

[dcutman]

It doesn't seem all that significant right now (other than it the largest cooperate takeover in history), but most likely just another small step to the "New World Order",

[nidieunimaitre]

Bud stinks and I'm a Yank.

Sad to say, but the "best" beer in this stinky pool is Stella Artois.

And I am a Belgian.

PS. Please please, never judge Belgian beers on the basis of Stella.

[nidieunimaitre]

Good old Karl predicted that this would happen - in 1848!

In 1867 he explained the reasons why.

I am not a fan of Karl, but in this he was right.

[geriatrickid]

It doesn't seem all that significant right now (other than it the largest cooperate takeover in history), but most likely just another small step to the "New World Order",

Oh yes, a major priority of the imaginary New World Order is to create a mega multinational brewer to provide some of the most unpalatable beers on the market. It is thanks to these large conglomerates that regional and microbrewers have grown in popularity. If it hadn't been for that, thousands of brew pubs and small brewers never would have had a market.

I recommend that you get on the BTS and hand out information sheets on the threat of the "New World Order". People need to be warned!!!!

Edited October 23, 2015 by geriatrickid

[Pib]

If the merger is allowed, the two companies will combine for revenue of $64 billion a year.

$64B is more than the GDP of country numbers 72 thru 188 per the IMF GDP ranking at this Wikipedia article...sort the first column.

[gerry1011]

It's "Anheuser-Busch InBev", not "InBey"...

ABI has a portfolio of over 200 brands (before the SABMiller takeover), so, there must be at least one good one

The story of AB-InBev (ABI) is a great business story.

It all started with Stella Artois.

The first merger was with rival Belgian brand Jupiler.

Then came the acquisition of Labatt in Canada.

The name of that company changed to Interbrew.

Then more acquisitions in Russia, Europe and China.

Then the combination with Ambev of Brazil, which resulted in the name change to InBev.

Then InBev bought Anheuser-Busch, the maker of Budweiser and Bud Light, in an all cash acquisition of 52 billion dollars, with another name change to Anheuser-Busch InBev.

This was followed by the acquisition of Grupo Modelo, the maker of Corona.

The SABMiller acquisition was in the pipeline since years, but the headline of this article is misleading.

Budweiser and Miller will not merge.

It is Belgian brewer ABI, biggest in the world, that wants to buy South African Brewer SABMiller, second in the world.

If the acquisition succeeds, the combined company will have to sell Miller in any case.

Indeed, ABI already controls nearly half of the US market with Budweiser and Bud Light. A combination with Miller is not possible due to antitrust law, and so, will be sold in order to make the acquisition possible.

The interest of ABI in SABMiller is that there are few overlapping markets (overlapping markets are mainly the US and China).

Beautiful story, at least for those who contemplate it from a business point of view.

[nidieunimaitre]

It's "Anheuser-Busch InBev", not "InBey"...

ABI has a portfolio of over 200 brands (before the SABMiller takeover), so, there must be at least one good one

The story of AB-InBev (ABI) is a great business story.

It all started with Stella Artois.

The first merger was with rival Belgian brand Jupiler.

Then came the acquisition of Labatt in Canada.

The name of that company changed to Interbrew.

Then more acquisitions in Russia, Europe and China.

Then the combination with Ambev of Brazil, which resulted in the name change to InBev.

Then InBev bought Anheuser-Busch, the maker of Budweiser and Bud Light, in an all cash acquisition of 52 billion dollars, with another name change to Anheuser-Busch InBev.

This was followed by the acquisition of Grupo Modelo, the maker of Corona.

The SABMiller acquisition was in the pipeline since years, but the headline of this article is misleading.

Budweiser and Miller will not merge.

It is Belgian brewer ABI, biggest in the world, that wants to buy South African Brewer SABMiller, second in the world.

If the acquisition succeeds, the combined company will have to sell Miller in any case.

Indeed, ABI already controls nearly half of the US market with Budweiser and Bud Light. A combination with Miller is not possible due to antitrust law, and so, will be sold in order to make the acquisition possible.

The interest of ABI in SABMiller is that there are few overlapping markets (overlapping markets are mainly the US and China).

Beautiful story, at least for those who contemplate it from a business point of view.

I like your last sentence. Do I detect a hint of sarcasm?

Personally I think it is a horror story, at least from a beer drinker's point of view.

[gerry1011]

It's "Anheuser-Busch InBev", not "InBey"...

ABI has a portfolio of over 200 brands (before the SABMiller takeover), so, there must be at least one good one

The story of AB-InBev (ABI) is a great business story.

It all started with Stella Artois.

The first merger was with rival Belgian brand Jupiler.

Then came the acquisition of Labatt in Canada.

The name of that company changed to Interbrew.

Then more acquisitions in Russia, Europe and China.

Then the combination with Ambev of Brazil, which resulted in the name change to InBev.

Then InBev bought Anheuser-Busch, the maker of Budweiser and Bud Light, in an all cash acquisition of 52 billion dollars, with another name change to Anheuser-Busch InBev.

This was followed by the acquisition of Grupo Modelo, the maker of Corona.

The SABMiller acquisition was in the pipeline since years, but the headline of this article is misleading.

Budweiser and Miller will not merge.

It is Belgian brewer ABI, biggest in the world, that wants to buy South African Brewer SABMiller, second in the world.

If the acquisition succeeds, the combined company will have to sell Miller in any case.

Indeed, ABI already controls nearly half of the US market with Budweiser and Bud Light. A combination with Miller is not possible due to antitrust law, and so, will be sold in order to make the acquisition possible.

The interest of ABI in SABMiller is that there are few overlapping markets (overlapping markets are mainly the US and China).

Beautiful story, at least for those who contemplate it from a business point of view.

I like your last sentence. Do I detect a hint of sarcasm?

Personally I think it is a horror story, at least from a beer drinker's point of view.

Why a horror story?

What beers do you like?

Isn't Leffe, for example, a good beer?

Stella is enjoyed by millions of people.

Hoegaarden is just great.

Edited October 24, 2015 by gerry1011

[In Town]

Leffe is good, the others, not so much...

[boomerangutang]

Well at least they're making some money, which justifies the high cost. In contrast, there are internet companies which get taken over in multi-billion dollar deals which are actually losing money and/or don't charge for their services (like; whatsapp). If people want to buy non-nutritious drink which looks the same going in as coming up, let 'em. The last beer I had was in Mexico in 1979. I barfed and was ill in my hotel room for two days.

[bendejo]

So now Big Beer is one company.

There is a lot of interest in craft beer in the US these days. Consumers have a choice between big corporate piss vs something made with sense of pride.

[dcutman]

It doesn't seem all that significant right now (other than it the largest cooperate takeover in history), but most likely just another small step to the "New World Order",

Oh yes, a major priority of the imaginary New World Order is to create a mega multinational brewer to provide some of the most unpalatable beers on the market. It is thanks to these large conglomerates that regional and microbrewers have grown in popularity. If it hadn't been for that, thousands of brew pubs and small brewers never would have had a market.

I recommend that you get on the BTS and hand out information sheets on the threat of the "New World Order". People need to be warned!!!!

I suppose it possible it is only coincidence this phrase has been used (10's) thousands of times over the last 100 years by our world and religious leaders to describe our future. This is also imaginary, right GK?

Unlike you, apparently, I find it disturbing that this or any other industry or institution is being monopolized on this scale.

I suppose you find it acceptable the way the financial, aerospace/defense, media, and agricultural industries are being monopolized all over the world as well? Do you find it by mistake that our world leaders and law makers allow, in many cases encourage this to happen and actually try to convince us this is for our own good, peace an prosperity?

I will assume you are also under the belief that these leaders are not under control of these corporations and conglomerates.

Ignorance is bliss GK.

[jmccarty]

I support the smaller independent brewers if I can find a brew that I like. Brutal Brewing has some good brews to choose from!

[FangFerang]

Now they can work together as one company to produce the cheapest, least interesting beer on the planet!

[gerry1011]

Now they can work together as one company to produce the cheapest, least interesting beer on the planet!

Among over 300 brands (combined) there must be at least one that is interesting.

There are chances that you drink beers belonging to these two major groups without even knowing it (ABI acquired several craft brewers in the US too).

Concerning the "cheapest", it is also not really true.

The strategy of ABI is to continue brewing local beers in each market it operates, as it was done before. However, ABI also introduces other premium brands on that market, and little by little brings the consumer to the more expensive brands.

This is, together with excellent management and economies of scale, what makes ABI the most profitable brewer among the majors.

The advantage of a brand belonging to a major group is that it can be offered in several markets, or even worldwide. That makes brands like Leffe available the US, or Budweiser available in China (where it is very successful).

Of course, the product must be right.

Some craft beers that taste awful have zero chance to reach a wide range of consumers, and are restricted to a minuscule group of consumers, who drink it only because it makes them feel somewhat "special"...

Edited October 24, 2015 by gerry1011

[nidieunimaitre]

Leffe is good, the others, not so much...

Leffe is not bad, but have you tried other Belgian beers?

[In Town]

Leffe is good, the others, not so much...

Leffe is not bad, but have you tried other Belgian beers?

Yes, I love Belgian ales. Chimay and Duvel. Cannot stand Stella...

[nidieunimaitre]

Now they can work together as one company to produce the cheapest, least interesting beer on the planet!

Among over 300 brands (combined) there must be at least one that is interesting.

There are chances that you drink beers belonging to these two major groups without even knowing it (ABI acquired several craft brewers in the US too).

Concerning the "cheapest", it is also not really true.

The strategy of ABI is to continue brewing local beers in each market it operates, as it was done before. However, ABI also introduces other premium brands on that market, and little by little brings the consumer to the more expensive brands.

This is, together with excellent management and economies of scale, what makes ABI the most profitable brewer among the majors.

The advantage of a brand belonging to a major group is that it can be offered in several markets, or even worldwide. That makes brands like Leffe available the US, or Budweiser available in China (where it is very successful).

Of course, the product must be right.

Some craft beers that taste awful have zero chance to reach a wide range of consumers, and are restricted to a minuscule group of consumers, who drink it only because it makes them feel somewhat "special"...

And in a previous post, you asked what is so bad about this merger?

Here's the answer, lets stay with Inbev.

Belgium had many very distinct pilsner (lager) beers. You could tell from outside a café (pub) what brand they sold. F ex Alken was bitter, Jupiler in between, Stella sweet.

Nowadays all Belgian lagers taste the same, as a result of big business & its monopolizing policies.

And then there is the Hoegaarden story.

Stella/Inbev buys the Hoegaarden brewery, and moves production to its Jupiler location (they had bought up Jupiler too).

The Belgian beer drinkers start a revolt: Hoegaarden is now brewed with different water at a different location, it is not the same beer, sales drop.

And in this unique case, big business had to admit defeat, and moved the production of Hoegaarden beer back to the old brewery in Hoegaarden city.

What it all comes down to is: Big Business = oligopolies = standardized products sold to standardized consumers

And about Inbev: To keep the headquarters in Belgium, the Belgian government agreed to let Inbev operate without paying income tax...

[nidieunimaitre]

Leffe is good, the others, not so much...

Leffe is not bad, but have you tried other Belgian beers?

Yes, I love Belgian ales. Chimay and Duvel. Cannot stand Stella...

The only positive thing I can say about Stella is: Stella is not worse the other lagers.

Unfortunately, it is also no better.

When I am thirsty, I drink water.

When I want a beer, I drink proper beer.

No need for pilsner (lager).

PS. You mentioned Duvel. There is now a new "Duvel triple hop" - excellent if you like bitter beer!

[Skeptic7]

Bud stinks and I'm a Yank.

Me too and i agree, but regardless our opinions...Bud Light and Bud are #3 and #4 in the world, respectively.

http://money.cnn.com/gallery/news/2014/08/19/world-beer/4.html

[NickJ]

Yay.....Chemical Rice Beer!!!!!........who needs hops and malt to get obese....

[gerry1011]

Now they can work together as one company to produce the cheapest, least interesting beer on the planet!

Among over 300 brands (combined) there must be at least one that is interesting.

There are chances that you drink beers belonging to these two major groups without even knowing it (ABI acquired several craft brewers in the US too).

Concerning the "cheapest", it is also not really true.

The strategy of ABI is to continue brewing local beers in each market it operates, as it was done before. However, ABI also introduces other premium brands on that market, and little by little brings the consumer to the more expensive brands.

This is, together with excellent management and economies of scale, what makes ABI the most profitable brewer among the majors.

The advantage of a brand belonging to a major group is that it can be offered in several markets, or even worldwide. That makes brands like Leffe available the US, or Budweiser available in China (where it is very successful).

Of course, the product must be right.

Some craft beers that taste awful have zero chance to reach a wide range of consumers, and are restricted to a minuscule group of consumers, who drink it only because it makes them feel somewhat "special"...

And in a previous post, you asked what is so bad about this merger?

Here's the answer, lets stay with Inbev.

Belgium had many very distinct pilsner (lager) beers. You could tell from outside a café (pub) what brand they sold. F ex Alken was bitter, Jupiler in between, Stella sweet.

Nowadays all Belgian lagers taste the same, as a result of big business & its monopolizing policies.

And then there is the Hoegaarden story.

Stella/Inbev buys the Hoegaarden brewery, and moves production to its Jupiler location (they had bought up Jupiler too).

The Belgian beer drinkers start a revolt: Hoegaarden is now brewed with different water at a different location, it is not the same beer, sales drop.

And in this unique case, big business had to admit defeat, and moved the production of Hoegaarden beer back to the old brewery in Hoegaarden city.

What it all comes down to is: Big Business = oligopolies = standardized products sold to standardized consumers

And about Inbev: To keep the headquarters in Belgium, the Belgian government agreed to let Inbev operate without paying income tax...

I don't think that all the Belgian lagers taste the same. Jupiler and Stella are very distinct, for example.

But, even if it was the case, it would not be the fault of ABI, since it does not own all of the lagers.

ABI may be (still) a Belgian company, but the Belgian market does not represent much in the Balance sheet.

Concerning Hoegaarden, it is considered as one of the fastest growing brand in the ABI portfolio, and is available in 60 markets... So I guess that quite a number of people are happy to be able to drink it outside little Belgium, thanks to the ABI global network.

At the time there was an intention to close breweries in Belgium, it was because ABI has 4 breweries in a market that could be served by only two.

The decision was indeed reversed, but it never had anything to do with the taste of the beer.

The success of ABI worldwide is not based on "standardization of the products" to be served to "standardized consumers".

To the contrary, the success of ABI is based on a very large number of brands, in order to have a number of brands available for each market and each consumer group, who enjoy different tastes at different times...

This is the opposite strategy as the one of Heineken in the past, which focused on only a single brand and making that single brand available all over the world.

Since then, Heineken has realized that a portfolio of different brands makes much more sense.

It is true that ABI enjoys some advantages in Belgium.

But, the business generated in Belgium by ABI is negligible. So is the amount of taxes (compared to the overall amount).

But I believe that the Belgian government prefers to keep ABI in Belgium.

On its side, ABI could relocate very easily to another country... If this happens, I can already imagine the reaction of the Belgians.

Edited October 24, 2015 by gerry1011

[bendejo]

Twenty years ago Hewlett-Packard made decent laptop and desktop computers (among other things). Then they bought Compaq, who made second-rate (IMO) systems. The result was that HP computers are now Compaq quality.

It's a bad day for beer drinkers.

[Usernames]

Wine and olive oil = health and longevity.

Beer and butter = disease and early death.

[gerry1011]

Wine and olive oil = health and longevity.

Beer and butter = disease and early death.

Really?

[Ulysses G.]

Beer is healthy in moderation.

[gerry1011]

Twenty years ago Hewlett-Packard made decent laptop and desktop computers (among other things). Then they bought Compaq, who made second-rate (IMO) systems. The result was that HP computers are now Compaq quality.

It's a bad day for beer drinkers.

The quality of Guinness, Budweiser, Corona, Stella Artois, Peroni, Skol, Brahma, Harbin, Leffe, Heineken, Jupiler,..., or Hoegaarden, or even Goose Island, has nothing to do with the major companies that own these brands (Diageo, ABI, Heineken and SABMiller in these examples).

The advantage of a craft brewer to be part of a large group is that the brand can be distributed in a much larger area, or even internationally. While, by brewing on his own, the Brewer is limited to his city (or village in many cases).

The discussion here is more about big corporations and capitalism, versus small brewers and (a feel of) authenticity. Nothing to do with the taste of the beer.

Edited October 25, 2015 by gerry1011