By Lisa Kerner
Charlotte, N.C., July 14 - Anheuser-Busch Cos. Inc. and InBev NV said they agreed to combine to form Anheuser-Busch InBev, the world's leading brewer, in a deal valued at $52 billion. Anheuser-Busch shareholders will receive $70 per share in cash in the transaction, according to a joint company news release.
In June, Anheuser-Busch rejected InBev's $65-per-share all-cash proposal to acquire the St. Louis brewing company. InBev sought to remove all the members of Anheuser-Busch's board in order to give the company's shareholders a direct voice in the proposed combination of the two companies, it was previously reported.
Both companies' boards of directors have approved the latest offer.
The transaction is expected to close by the end of 2008, pending shareholder approval.
InBev said it received fully committed financing with signed credit facilities from a group of financial institutions that includes Banco Santander, Bank of Tokyo-Mitsubishi, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING Bank, JPMorgan, Mizuho Corporate Bank and Royal Bank of Scotland.
The transaction will be financed with $45 billion in debt, including a $7 billion bridge financing for divestitures of non-core assets from both companies. InBev, a Leuven, Belgium-based brewing company, has also received commitments for up to $9.8 billion in equity bridge financing.
Anheuser-InBev will make St. Louis the headquarters location for the North American region and the global home of the flagship Budweiser brand.
According to InBev, it is the number-one brewer in 10 markets where Budweiser has a very limited presence and has a "superior footprint" in nine markets where Budweiser is already present.
Budweiser, Stella Artois and Beck's will become the combined company's leading global brands.
All of Anheuser-Busch's U.S. breweries are expected to remain open.
The combination is expected to yield cost synergies of at least $1.5 billion annually by 2011 as well as "meaningful" revenue opportunities through expansion of Budweiser on a global scale.
InBev said its chief executive officer Carlos Brito will lead the combined company.
Anheuser-Busch president and CEO August Busch IV and one other current or former director from the company's board will join the board of directors of the new company.
Key members of both InBev's and Anheuser-Busch's leadership will join the combined company's management team.
Brito said the merger will create "a stronger, more competitive global company with an unrivaled worldwide brand portfolio and distribution network, with great potential for growth all over the world."
"This agreement provides additional and certain value for Anheuser-Busch shareholders, while enhancing global market access for Budweiser, one of America's true iconic brands," Busch said in the release.
"In the United States and Canada, both InBev and Anheuser-Busch have seen significant benefits from our existing relationship and we look forward to replicating this success in other parts of the world," Busch added.
Commenting on the combination of InBev and Anheuser-Busch, Grupo Modelo, SAB de CV said it is reserving its contractual rights, including a consent right, under its agreement with Anheuser-Busch.
Anheuser-Busch has a reported 50% stake in Grupo Modelo, the importer of its products in Mexico, including Budweiser, Bud Light and O'Doul's.
"Our agreement with Anheuser-Busch was carefully constructed to ensure we have a definitive say in who our partner is," a Grupo Modelo news release stated.
The Mexican brewer said it has been in "active discussions" with InBev regarding how the two companies can work together should Grupo Modelo consent to InBev becoming a minority owner of Grupo Modelo through its acquisition of Anheuser-Busch.
"We are confident that our agreement, which is governed by Mexican law, gives us the right to decide whether or not to consent to the potential acquisition of Anheuser-Busch by InBev," Grupo Modelo added.
InBev is being advised by Lazard, JPMorgan, Deutsche Bank and BNP Paribas.
Financial advisers to Anheuser-Busch are Goldman Sachs & Co., Citigroup Global Capital Markets Inc. and Moelis & Co.
| Acquirer: | InBev NV
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| Target: | Anheuser-Busch Cos. Inc.
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| Announcement date: | July 14
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| Transaction total: | $52 billion
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| Price per share: | $70.00
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| Expected closing: | End of 2008
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| Stock price of target: | NYSE: BUD: $66.60 on July 11
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