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06.18.2008 3:56 pm

A-B sale: globalization is inevitable

St. Louis Post-Dispatch

With our national economy going south and our foreign policy in shambles, Republicans and Democrats in the Show-Me state are for once singing on the same page.

Our elected representatives are in lockstep guarding our heritage in strong vocal opposition to the $65 buyout offer of Anheuser-Busch by the Belgian brewer InBev. In an emotional lather, Senator McCaskill blurts, ” this is not a company that’s in stress ” and howls, ” We do not have a ‘ For Sale ‘ sign on our front lawn in America. ” Oh, really? And these are our leaders who make economic decisions in Congress for the country? Welcome to the global economy ! It is all right for American companies to acquire competitors overseas, but not in our backyard. When the shoe is on the other foot they wave the flag to protect and defend their iconic paymasters. And it’s a vote getter, too.

If these curmudgeons understood the economics of global capitalism, they and the Anheuser-Busch board would be down on their knees genuflecting before a fair and sizable premium for a stock that has been mired for four years in a rut. Value is assigned on its worth today, not on the speculative future. InBev will enhance the prospects of A-B in growth beyond the United States and bring a civic concern to St. Louis equal to what has gone before. Why shouldn’t they? It is in their best interest to show the same regard for our community as their potential target.

It is not just the hedge funds, Mrs. McCaskill, who are in the stock, but institutions of every stripe and individual investors who ultimately control the outcome — not just the Busch family any more. Warren Buffett knows value better than anyone and probably is counseling that a bird in the hand is worth two in the bush. I would pay close attention to him. One long time board member, Vilma Martinez, is the Chairman and partner or Munger, Tolles, and Olson, the law firm of Buffett and the Vice Chairman of Berkshire Hathaway, Charlie Munger. Should the board ignore their fiduciary duties and reject this offer trying to squeeze out a few more Euros, a tender offer directly to shareholders should seal the deal.

Instead of creating a fire storm of ill will, the board should embrace InBev and get this acquisition off to a good beginning - for the city, the state, the employees, and the stakeholders. Otherwise more articles like Andrew Ross Sorkin’s in the New York Times Business Day Tuesday, “Chilling A Deal For Bud” may cast personal aspersions on other managers and directors as well as A-B’s youthful CEO, known now as The Fourth. But, nonetheless, it can be a done deal. Wake up, St. Louis, and smell the hops.

Laurence C. Day

St. Louis

5 comments

Comments are closed.

Laurence,
Suck my hops you pompous donkey.

- Everyone who doesn’t live in Frontenac

— Master P
9:55 pm June 18th, 2008

Bud Light presents: Real American Heroes

(Real American Heroes)
Today we salute you, Mister Big Company Corporate Board Member
(Mister Big Company Corporate Board Member)

You started a glorious career with only one thing in mind. To reach the top. And clawed your way up the corporate ladder, stepping on, I don’t know how many people to get there.
(Get out of my way)

It takes a lot of really hard work to turn a five foot cubicle into a fifty foot long table. And while your coworkers were being thrown out onto the street, you didn’t falter one bit. Not you.
(I made it)

It must be comforting to know that when the employees merely sell the goods, you can buy and sell the company.
(The whole enchilada)

Anyone can learn how to read spreadsheets and count profits. But it takes real talent to light up a big cigar and make those really tough decisions.
(Whatever, Dude)

So polish up that parachute and crack open a cold one `o surrogate of the shareholder.
(Wax on…)

Because when it comes to No. 2; well, that’s really for everyone else.
(Number two)

Bud Light Beer, Anheuser-Busch, St. Louis Missouri

— Keith
10:10 am June 19th, 2008

The loss of BUD as an independent American Company for a few bucks is not a good value. Quality jobs, with quality benefits, tax revenue, gifting, dividend income stream is all part of what BUD means to America. Does value mean you must make a huge stock jump every quarter?

I have owned BUD shares for over 26 years. The dividend I receive every year is more than I paid for the stock 26 years ago, and I still have the full value of the stock! I think that is a very good value. Far better than a one time, taxable $65.00 per share hitbeing offered by INBEV.

Buffetts willingness to sell out to INBEV, or anyone else, really reflects how greedy this country has become. As long as I make money, who cares what happens to America seems to be the greedy portfolio owners point of view. Buffett claims he is a buy and hold investor, I guess that is until he gets a good price. What does this mean for other great American companies in Buffetts web; the Washington Post, Dairy Queen, The Buffalo News, Wells Fargo, American Express, and Coke?

Maybe Mr. Buffett will not be happy until all of the quality American jobs are gone, and everyone is working at WALMART. Mr. Buffett, for his part, may actually be getting the best deal in that he may actually get INBEV stock while everyone else gets a little coin in our pockets. How nice, is that really looking out for the shareholder? Maybe Mr. Buffett is concerned investors will start questioning HIS companies poor return for investors over the past 10 years?

The quality of life and the value of a good company is worth far more than a few bucks.

The offer of buying Modelo is a great one. Oddly, the controlling family of Modello wants to stay “independant” and may hold off and let INBEV become the owners of 50% of Modelo when it buys BUD. After this, Modelo will wish they had A-B back! This will happen right before INBEV buys ALL of Modelo.

I feel sad for a person like Mr. Day above, he seemes to have just realized we are in a global economy! I think my great great great uncles that were in the Far East trade in Salem, MA. over 200 years ago would laugh at how silly Mr. Day sounds. Global economy! The only difference today is the greed that allows us to sell our own mother if the price was right, and not even think twice about it.

Sean G
York, Maine

— SeanG
3:05 pm June 19th, 2008

Allow this takeover at your peril. I am writing from England where in 2004 InBev closed a brewery that had been brewing beer since before Napoleon Bonaparte. This brewery in Manchester, continued brewing throughout WW11 despite the best attempts of Hitler’s Luftwaffe and only stopped brewing when InBev broke all their promises about respecting the heritage etc. They will do exactly the same to you, corporate greed will take over in the end. The “Boddington’s Brewery” in Manchester was a leading landmark in the city, in much the same way as Bud is in St Louis, this counted for nothing in the end. The UK chief executive also drunk “Boddies Beer” when they took over. You have been warned

— Franny
5:13 pm June 19th, 2008

Mr. Day - you are naive to believe the “words” of InBev CEO Carlos Brito…his actions in past takeovers say much more than his smirking face while stating “nothing will change”. If InBev takes over AB, the end of AB and it’s products won’t be far behind. InBev is known for their “zero sum budgeting” (aka - bean counter mentality) where each brand starts at zero budget and has to justify every penny. Contrast that to the carpet bombing methods of AB where all products are constantly “in your face”. AB has some of the best marketing/advertising in the world, and there is a good reason AB has a 50% market share in the USA. Once the InBev bean counters get a hold of the budgets, market share will decline and so will the company. It’s not rocket science, it’s the difference between a Marketing driven American Icon called Anheuser-Busch, and a bean counting Belgian mergers and acquisitions company called Inbev. The implosion of AB is coming soon!

— Gaucho
2:08 pm June 20th, 2008