Live-blogging the A-B/InBev conference call

Updated 8:19 a.m.

That’s about it.

Brito just wrapped up the call, saying he was “very happy that our conversations wound up the way we always wanted, which was friendly.”

He said he’s glad that August Busch accepted an invitation to sit on InBev’s board, and noted that, while the deal has been signed, it still must be closed. “Then we get to work,” he said.

“We’re very excited to build this great company even further,” Brito said. “That’s always been our dream.”

One closing thought: This, clearly, was Carlos Brito’s show. He answered every question and talked almost non-stop for more than an hour. He was gracious in victory and confident in the future of the company.

On the other hand, August Busch IV barely said a word. He made a brief statement at the beginning praising Brito and welcoming the deal, then we heard nothing from A-B until one analyst question about why the deal turned friendly. That was answered by Dave Peacock, vice president for marketing for domestic brewing.

Then, Brito gave Busch the chance to comment in the closing statements, and someone – it was unclear if it was Busch or Peacock – thanked him and said A-B was “very excited” about the merger.

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Updated 8:10 a.m.

Another good question: This appeared hostile. Now it’s friendly. What changed?

Brito noted that the two companies have been working together since 1980, and top management knows each other well.

“In terms of procedure sometimes you go one way or the other, but we’ve always said since the beginning that our preferred way would be the friendly, negotiated way,” he said. “We were so glad when we could sit down a couple of days ago and start talking about the future instead of other things..”

In other words, he didn’t answer the question.

Neither, really, did Dave Peacock, vice president of marketing for A-B’s domestic beer unit.

“We met for the last few days with Brito and his team. We were very impressed with the dialogue and the commitment, as Brito said, to the future,” he said. “The belief and confidence they had in Blue Ocean (A-B’s previously announced restructuring plan) really reassured us that this was a good combination.”

Of course, the extra $5 a share probably didn’t hurt matters, but neither discussed it. 

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Updated: 8:01 a.m.

Brito artfully dealing with questions on two of the hot-button issues of this merger.

One: Do you want the other 50% of Mexican brewer Grupo Modelo:

“It’s a partner we love to have,” Brito said. “We’ve had very good discussions with them. We think it’s a great opportunity and great upside for us and them. … We see a great future.”

Two: Will you make changes to A-B’s distributor network?

“We recognize that wholesalers in the U.S. are an integral part of the way A-B was able to build this great brand,” said Brito, who noted that InBev has learned a lot about working with distributors from its partnership with A-B. “It’s a very important piece of the whole relationship and we have transplanted that to some of the other parts of our company.” 

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Updated 7:50 a.m.

On to analyst questions:

When Interbrew and AmBev merged in 2004, the company shot for 2 to 3 percent cost savings, one analyst noted. This deal is shooting for savings equal to 8 percent of A-B’s revenues. How will they get that much?

The difference, Brito said, is that Interbrew and Ambev operated in a number of countries and were dominant in relatively few. A-B is the dominant brewer in the U.S., he noted, and that will make it easier to reach economies of scale here.

“This gives us very good market share, very good scale, in one location,” he said. “It’s unheard-of scale in our industry.”

He also said he was “very impressed” with the $1 billion cost-cutting plan known as “Blue Ocean” that A-B has already announced. They’ve been talking with A-B leadership about it over the last three days. That will be the bulk of the synergies created in this deal, the rest coming from suppliers and eliminating cost overlaps at the corporate level.

“That gives us great confidence,” Brito said. 

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Updated 7:40 a.m.

Brito just gave his shout-out to St. Louis, pledging it will be the company’s North American headquarters and the base for InBev’s expansion of Budweiser as a global brand.

He also promises to keep the company’s 12 breweries open, specifically mentioning the Pestalozzi Street brewery, and says InBev will maintain “other traditions of Anheuser-Busch, including Grant’s Farm and the Clydesdales.” 

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Updated 7:37 a.m.

InBev has been built by mergers, and it’s good at them, Brito said.

He traced the company’s growth through mergers with brewing giants like Labatt and Beck’s, and then the combination of Belgian Interbrew and Brazilian AmBev in 2004.

In each of those cases, the company saw strong growth in sales and revenues, gaining market share and profits, he said.

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Updated 7:30 a.m.

Making the business case for the deal, Brito notes that the new company will be 62% bigger in volume and revenues than the world’s next biggest brewer – SAB Miller. It’ll be the number one brewer in North American and Latin America and No. 2 in Europe and Asia. And it will be well-balanced in both developed and developing markets, providing a “natural hedge” against swings in the world economy.

It’ll also be more efficient than either company could be alone.

Brito predicts $1.4 billion in cost savings by 2011, up from the $1 billion A-B pledged two weeks ago.

The company will follow through on that cost-saving plan, and add $415 million elsewhere, primarily through overlap in the Chinese market, more efficient procurement of supplies, “elimination of overlapping corporate functions” and better cost management.

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Updated 7:23 a.m.

To Brito, this merger is “a natural next step of a successful relationship between Anheuser-Busch and InBev,” that began in 1980, when the two companies teamed up in Canada. That relationship deepened with a partnership in South Korea, and again in 2006, when Anheuser became the exclusive importer of InBev brands in the U.S.

The two companies share many values, Brito said, including a “no-compromise towards quality,” a deep brewing heritage and an emphasis on environmental and social responsibility. 

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Updated 7:18 a.m.

Opening statements by InBev CEO Carlos Brito and Anheuser CEO August Busch IV:

Both men stress the “friendly” nature of the deal and voice their mutual respect. Brito discusses how this will create “the global leader in beer and one of the top five consumer products companies in the world,” and a company which has three of the world’s five best-selling brews – Budweiser, Bud Light and Skol.

“This transaction brings significant benefits for all shareholders of both companies,” Brito said. “It provides value neither company could have brought on its own.”

Busch, speaking second, calls the combined company a “global powerhouse.” The A-B board considered all alternatives, he said, but ultimately decided the company would be best-equipped to compete if it merged with InBev.

“This is a friendly business agreement,” he said. “Carlos Brito is a strong leader. I respect him and he has my firm backing.”

Updated 6:51 a.m.

Well, it’s the morning after. The board of Anheuser-Busch has agreed to a $52 billion takeover of the local brewer by Belgian InBev. And now both sides are expected shortly to share all the details with analysts. The conference call begins in 10 minutes, and we’ll be updating it live. So please stay tuned.

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Anheuser-Busch and InBev will hold an analysts call at 7 a.m. today. Come back to read what the companies have to say about InBev’s takeover of A-B.