The tax consequences of this deal to long time shareholders are one of the worst things about it. If your basis is low enough and you own enough stock, you are essentially losing all the merger incited gain to taxes so it negates any benefit from the deal. Of course you will also lose your solid dividends as well so that makes it even worse.

A-B should make sure that the tax issues associated with this merger are well publicized. Money will run this thing, and being able to show that the premium on the stock will be eaten up by the Feds is a big negative for Inbev’s move…

Are the tax rules related to a merger different from those a stockholder would face by simply selling their stock any other way? Meaning, are they taxed more by selling to Inbev than they would be if they sold at a random time next year?

The tax issue is a non-issue. Many of the major shareholders are institutional investors who pass the tax payments through to the individual investor. With the exception of Berkshire Hathaway, the top shareholders are money management companies. They don’t play taxes on the stock gain, mutual fund shareholders do.

Money managers still care about what their investors think. There have been record redemtions of hedge fund investments this year. Several of my funds have asked for authority to amend their rules making it harder for investors to get out (yeah, I’m voting for that). I spoke to a hedge fund manager today on another subject and he said there seems to be a lot of concern in Greenwich about whether Missouri politicians will screw it up. Without that risk, the stock might be a little higher. Keep in mind that Buffet is a big Obama supporter and advisor. If he’s selling, you can bet your cap gains rates are going sky high if Obama wins.

Of course the Dutch papers are saying Buffett is on InBev’s side…media is media, regardless of where they are. Most likely Mr. Buffett and Mr. Busch will talk, but “Four” is his grandfather’s grandson! I don’t believe he’ll want to be pushed around by a foreign entity like InBev, but I do believe he’s shown, by the investments he’s made over the last several years, he’s very concerned about shareholder profits. I believe he’ll find a way to make AB a more profitable investment without selling out to a foreign entity. After all, it takes more than just a few years at the helm to start seeing a major change for stockholders in a company with the product, competition and size of AB. Anheuser-Busch is an American company, that’s where it belongs and that’s where it should stay!

If a person is for the free market, they will be for the deal. However, many are not for a free market and simply resort to emotions. There is something which really could ruin the deal and that would be if the dollar were to climb significantly against the euro.

It’s unusual that the board of directors of A-B needs convincing to not sell as it’s very predictable they’ll reject the offer. However, a proxy vote by shareholders will show that it will be sold to InBev.

Looking at things from an open mind, the sale should occur as no one has given a legitimate and unemotionally attached reason for the sale not to occur.

Dan–I think you’re flat wrong on your main point–the dollar strengthening would help the deal. They’re using Euros to buy a future stream of dollar-denominated income. A rise in the dollar against the Euro means that what they bought is worth more in Euros.

Shell–What has Busch done to show that he should be worth $65 right now? That’s what InBev has put on the table. Clearly the big money out there in the market didn’t see it. No one has come up with a real rationale for how AB would be worth this much without the deal taking place.

I’m generally for free markets, PROVIDED THAT they are competitive. There are a lot of rether sleazy political and marketing tactics that A-B has used over the years to eliminate competition. The free market argument against the takeover by In Bev is that it would result in even more concentration in the beer market and, therefore, ultimately higher prices and less choices for consumers. That’s what anti-trust legislation is for.

The good news in the brewing industry is that many micro-breweries are succeeding where older small local breweries failed, and they do it primarily by having good tasting products rather than a lot of b.s. advertising. Whatever the fate of A-B, they are the ones that I will continue patronizing.