Processing Magazine

InBev, Anheuser hold deal talks: source

July 11, 2008
According to Reuters, Anheuser-Busch Cos Inc has finally begun negotiations for a friendly merger with InBev NV, a source familiar with the situation said recently, sending shares of both brewers up about eight percent.

Anheuser, the maker of Budweiser and Michelob, had been a reluctant takeover target, spurning InBev''s $46.3 billion bid and fighting efforts by the Belgian-Brazilian company to oust its board.

After weeks of mounting tensions, The Wall Street Journal reported on its website that InBev, maker of Stella Artois and Beck''s beer, had raised its bid to $70 a share from $65 in an effort to seal a friendly deal.

Anheuser''s board is likely to accept the sweetened offer this weekend, the paper said, citing a person familiar with the matter.

Helping to drive the two sides into talks are signs that some big investors in Anheuser, including second-largest shareholder Berkshire Hathaway Inc, were leaning toward backing a deal with InBev, according to a report in The New York Times.

Analysts have said a seal of approval from billionaire investor Warren Buffett, who runs Berkshire, would probably influence other shareholders.

Berkshire, which owns a five percent stake in the brewer, did not immediately return a call seeking comment, but Buffett told Reuters on June 25 that he had yet to take a position on InBev''s offer.

Ann Gilpin, a retail analyst with Morningstar, said the sweetened offer would be compelling to shareholders.

The Journal said so-called social issues still need to be worked out, including the name of the combined company, which would be the world''s largest brewer.

InBev and Anheuser-Busch declined to comment.