The...Belgian Prince Of Beers!

Tuesday, July 15, 2008

So I'd be remiss if I didn't have an article, however late, about the sale of an American Institution to Belgium-based InBev.

Here's the deal. InBev, a Belgian-based brewing conglomerate, bought Anheuser-Busch (AB) for $70 a share, totaling about $52 million.

They then created a new company called Anheuser-Busch InBev (wow...lots of imagination...sort of like AB's beer...), at which AB will have 2 board seats. Thus, the maker of Bud and Michelob combines with the maker of Stella Artois and Bass (among many, many others), giving them yearly sales of more than $36 billion. That is expected to surpass the recent SABMiller conglomerate.

This has every bit as much to do with wanting to continue to compete dollar-for-dollar with SABMiller as it does with the fact that the American craft brewing movement, as a whole, continues to outgrow the macros.

I know I have over-simplified this issue (craft sales versus macro sales), and there's a lot more to it, because at the end of the day, despite the outpacing, Bud and Miller still crush everything else. They didn't make this move because DogFish Head and Stone are killing them...it's because SABMiller could be killing them.

This also means, on another level, that the two American icons of Miller and Bud are no longer American-owned. They're now Brit (SABMiller) and Belgian (ABInBev).

Discuss.

9 comments:

Bob "Serious McLiteral" 10:00 AM  

The fall of the dollar probably has as much to do with the situtation as trends in the beer industry. American assetts are just affordable right now.

The fall of the dollar sure is a double-edged sword. While companies are being bought up and it is getting more expensive for us to pay off our national debt, American exports are up. Just yesterday and GM announced that it will be start building Opel and Vauxhall cars, bound for Europe, in Detroit.

We are going to see more American companies being bought up in the coming weeks, AB isn't the first, nor will it be the last.

Smitty 10:04 AM  

That is a great interpretation, Bob. Maybe I looked at it the wrong way. For AB, it was a chance to not get slaughtered by SABMiller and make a huge worldwide partnership out of the deal.

But from inBev's perspective, it was a huge, value-priced asset to gain while the gettin' was good.

Sopor 11:37 AM  

Interesting that the big names in American beer are owned by two companies from countries BIG in brewing!

And as much as we would like the think that craft beer has had it's small affect... what has had more of an affect are people switching to wine and liquor!

B Mac 11:50 AM  

Two reasons I'm not going off the deep end on this... at least not yet.

First, InBEV isn't just trying to buy up market share; they're buying a product with excellent market penetration and a loyal following. This isn't Daimler bailing out a struggling company that's having trouble selling product. They know that the benefits of this deal are tied to the continuity of the product on the shelf.

Second, as Sopor correctly points out, InBev comes from the Land of Beer Goodness. I'd be a lot more suspicious if AB was selling to a Chinese firm (no offense, Tsingtao Pilsner) or some Ukranian holding company (no offense, um... Mail Order Bride Ale? Chernobyl Steam Lager?).

Bob "Serious McLiteral" 12:12 PM  

"This isn't Daimler bailing out a struggling company that's having trouble selling product."

While this is another post, for another time, about another industry. Daimler did not bail out Chrysler, they robbed them. Daimler was the one in need of being bailed out. Daimler bought Chrysler in the guise of a merger and then used all their billions in cash to prop up Mercedes. They then threw the corpse of Chrysler to side.

When Chrysler was bougt, it was one of the most efficient, most profitable auto copmpnies in the world. Now it is nearly bankrupt.

B Mac 12:32 PM  

This isn't Daimler bailing out a struggling company that's having trouble selling product.

My bad. I meant Cerberus, not Daimler. Forgive me, I'm in short-timer mental shutdown mode here at work. Thanks for the assist, McLiteral.

As you correctly pointed out, Daimler is the reason that Chrysler was IN the mess they were (and pretty much are) in.

Smitty 3:54 PM  

Here's what they say about it on Beer Advocate, along with the discussion posts afterward.

You may have to become a member of Beer Advocate to read it. Which is something I am CONFIDENT that ALL ATK readers already are.

Mike 6:42 AM  

Glad to see A-B and Miller foreign-owned.

That way we don't have to take responsibility for the swill they peddle.

Rickey Henderson 7:08 AM  

The funny part is that for reasons that mystify Rickey, they LOVE Budweiser in certain areas of the UK (they did when Rickey was travelling abroad anyway).

So what now, do they replace the Budweiser clysdales with shetland ponies?

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