Anheuser-Busch agrees to takeover bid

The new owner of Anheuser-Busch promises to retain its domestic breweries.

BRUSSELS, Belgium (AP) — The maker of the King of Beers has agreed to go to work for the Belgian brewer InBev SA.

Anheuser-Busch Cos. said early Monday it had agreed to a sweetened $52 billion takeover bid from InBev, creating the world’s largest brewer and heading off what was shaping up as an acrimonious fight for the maker of Budweiser and Bud Light beers. Inbev brands include Stella Artois, Beck’s and Bass.

The combined company will be called Anheuser-Busch InBev.

As of the end of last week, InBev said it would be the world’s third-largest consumer products company by market capitalization after Procter Gamble of the United States and Nestl SA of Switzerland.

The Anheuser-Busch board accepted the higher takeover offer Sunday night from Belgian-based InBev, according to a joint press release.

The deal is expected to close by year-end.

“What consumers care is that their Bud will always be their Bud, and that’s what we’re committed to, not only the product, the quality, the beer ... but also the heritage, the breweries, who brews the beers, and everything that’s connected to the breweries,” InBev CEO Carlos Brito said in a media conference call.

For InBev, the deal gives an aggressive company an iconic beer brand — Budweiser — to sell into emerging markets such as China and Brazil where it has already established a wide network.

InBev is the world’s second-largest beer-maker, narrowly behind SABMiller. Swallowing Anheuser-Busch sees it leap ahead, capturing half of the U.S. beer market and a fifth of China and Russia.

Brito will be chief executive officer of the combined company, while Anheuser-Busch CEO August Busch IV will step back into a nonexecutive role. He will be a member of the new company’s board alongside one other nominee from Anheuser-Busch, yet to be named.

“We went through some difficult times together, and our employees did as well, but in the end this is a friendly transaction and we are going to work very hard for our new shareholders,” Busch told reporters.

Shareholders will receive $70 a share, a $5 increase over the offer Anheuser-Busch rejected in June. Both companies’ shareholders must approve the deal, as must U.S. and EU antitrust regulators.

InBev said it plans to use St. Louis as its North American headquarters, and that it will keep open all 12 of Anheuser-Busch’s North American breweries.

Brito tried to reassure workers worried about possible job loses, saying the company could instead expect “growth and investment” despite Anheuser-Busch’s existing plans to shed 1,185 positions — mostly by offering early retirement and not filling existing vacancies.

The companies will, however, sell off “noncore assets” that they would not name to raise some $7 billion to finance the deal. InBev will also borrow $45 billion and plans to issue new shares to raise another $9.8 billion.

Shareholders won’t see much joy in the short-term. InBev warned of lower dividends and no benefit to earnings per share until 2010.