As a native of the St. Louis metro area, people have been asking me what I think of the recent “merger” of Anheuser-Busch, the largest American brewing company, and InBev, a Belgian brewer. The fact is, I have two conflicting opinions. As a son of the St. Louis metro area, I am saddened by the fact that the brewing company that is the heart and soul of that region of the country will be owned by a foreign entity. The pride that I always felt knowing the number one American brewer had its head quarters in my neck of the woods is going to be greatly diminished. This is how my heart feels about this merger. My head, however, has a better appreciation for the work and planning that went into this deal.
Keep in mind, I certainly do not have all of the details of this transaction, and I am certain even the press is not fully aware of everything going on behind the scenes. However, as I understand it, the only real loss here will be an emotional loss similar to the feeling I have already expressed. First, let’s look at what is actually transpiring, assuming the share holders and anti-trust officials approve the deal. The press is referring to this as a merger of two brewing companies. A merger is a statutory combination of two or more corporations by the transfer of the properties to one surviving corporation. In this case, the surviving corporation is InBev, though many aspects of Anheuser-Busch are likely to survive the merger.
The new company, currently branded as Anheuser-Busch InBev, will effectively become the largest brewing company in the world. Anheuser-Busch already accounts for 48% of the American market, and InBev will provide additional distribution through all of Europe and elsewhere. InBev and Anheuser-Busch already had various partnerships before this deal. InBev was the largest Anheuser-Busch distributor in Canada, I believe. So, in the end, it comes down to assessing the actual changes that will take place.
InBev has stated their intention to keep all twelve of the Anheuser-Busch breweries operating in the United States, and to keep their North American headquarters in St. Louis. Now, Anheuser-Busch was already planning to eliminate about 1200 jobs, mainly by offering early retirement and not filling open positions. Aside from this, InBev has not released any plans to layoff workers in the United States. Chances are, these layoffs will come sometime in the next year or so, but that may have happened regardless of who owned the company, that’s just business. Meanwhile, August Busch IV will maintain a position on the board of directors, but will not hold any executive position in the new company. While it is sad that a Busch will not be running this company, that is just the way business goes sometimes.
There are a lot of people out there who are trying to decide if they will continue to drink Anheuser-Busch products, now that it is no longer an American owned company. I find a slight flaw in this logic, as it now stands, since the beer is still going to be brewed in the United States. However, I am also the kind of person that does not base my consumer decisions on politics or other issues. If I like a product, I will buy it. Now, I grew up in an area that is greatly influenced by Anheuser-Busch products, which is why I buy their products. Personally, I do not drink much anymore, but when I do, rest assured that 75% of the time, it will be an Anheuser-Busch beverage.
http://www.cnn.com/2008/US/07/14/anheuser.inbev.ap/index.html
http://dictionary.reference.com/browse/merger
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