Brand News: Friday, July 18, 2008
Anheuser-Busch InBev is the New Brewing Giantby Elise Neils
InBev is the world’s second-largest beer-maker, narrowly behind SABMiller, but will leap ahead after its acquisition of Anheuser-Busch with which it is capturing half of the U.S. beer market and a fifth of China and Russia. As of mid-July 2008, InBev claimed that it would be the world’s third largest consumer products company by market capitalization after Procter & Gamble and Nestle SA.
The $52 billion takeover bid from InBev is valued at $70 a share, a $5 increase over InBev’s previous offer that was rejected by Anheuser-Busch in June 2008. Both companies’ shareholders must approve the deal, as must U.S. and EU antitrust regulators.
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.
Despite more than 100 legal disputes centered on the Budweiser® trademark, Anheuser-Busch’s most valuable assets are its two core brands: Budweiser® which is currently sold in 16 countries; and the Bud® brand sold in 15 countries. Based on the $52 billion purchase price and the value of A-B’s other assets and liabilities, we at AbsoluteBrand™ estimate the value of the Budweiser® and Bud® brands at approximately $20 billion.