The overreaction of the media, liberals and Congress to the post-Enron days have left America [extremely vulnerable to] foreign buyers. As I wrote some weeks ago here, AB’s board will seek counsel of Goldman Sachs which will issue an opinion that the deal is either good or bad for shareholders. The days of opinion shopping are over as everyone is afraid of being sued, or worse. Goldman will be afraid to issue anything but what is accurate, especially in such a high profile case that has alraedy attracted the interest of politicians and regulators. They have no choice. The board will also have no choice but to vote in accordance with that opinon or face the wrath and lawsuits of shareholders, unless they can be convinced by management there is a better option. That better option can’t be the old tired management songs about new strategies. It will have to be relatively timely or what do you say to the mythical 1000 share shareholder in New Jersey who stands to make ten or twenty grand. The new rules say nothing matters except shareholder value. Everyone jumped on the bandwagon and pushed through Sarbannes Oxley which has put our companies at a severe disadvantage to global competitors. This combined with a weak dollar which we demanded to bail us out of irresponsible home loans has created the perfect storm which will cost this town dearly. That notwithstanding, good managers manage around adversity. This company is also hamstrung by having a CEO who, lets face it, was probably not the strongest candidate the company could have hired. The odds against that are astronomical. They ought to at least start including the Anheusers in the job pool.

Law of nature: Big fish eat smaller fish. A-B ate all the smaller fish they could, including Rolling Rock, and bought heavily into others like Grupo Modelo and Tsing Tao.

The Belgians have had a growing stake in the U.S. for many years and, like other foreign-based firms and governments, they’ll continue to gain influence unless we’re willing to work harder and smarter.

Proud firearms names like Winchester and Browning are now owned by FN Herstal (formerly Fabrique Nationale of Belgium), which now makes most of our military arms. Our John M. Browning couldn’t interest American firms in manufacturing his inventions, so he went to Belgium a century ago.

Electrebel (formerly Suez-Tractebel) owns many electric power plants on American soil.

Well said, flyover. A-B’s abandonment of its poison-pill defenses after Enron have now left it completely vulnerable to InBev. The unctuous Brazilian CEO of InBev waxes so sweetly about how the St. Louis operations will remain intact. Yeah, sure. I remember when Boeing took over McDonnell Douglas that the St. Louis defense operations were called the “McDonnell Aircraft and Missile Systems.” The “McDonnell” remained part of that for about a week. But McDonnell Douglas was never as interwoven with the fabric of the city as A-B. The only good news is that the local Democrats such as Bill Clay, Frankie Slay, Vinnie Schoemehl, and Dick Gephardt — surely smug and cocksure in the wake of the post-Enron “reforms” — will now get it good and hard in the wake of the inevitable A-B shuttering locally. Good and hard.

It is now sad to hear the whining of those who despised the “benevolent capitalism” of the past, which, yes including inbred boards of directors, or as the media liked to call it, the old boys club. As Ronald Reagan said once, “ask yourself, are you better off now”? Do you seriously think if the AB board was comprised of the CEO’s of other companies on whose board August Busch served this would have been discussed for more than five minutes? As we near Father’s Day, we can reflect on the paternalistic corporations of the past. They did treat employees as family. Whether it was Gussie Busch, or Buck Persons, or Old Man Mac, they took care of their people and their city. I guess it is natural that children often resent their fathers and we threw them out for a more democratic form of corporate governance. One by one, their companies went away. Their leadership on local issues disappeared. Their benefits have been turned into profits. My father, who worked at McDonnell Aircraft once innocently said, “I don’t understand why all those people don’t have health insurance, after all, it only costs $1.50 a week.” He never realized that Old Man Mac picked up the tab for the rest and apparently he never threw it in their faces, he did it because he was a good man doing what was right. We have traded pensions for 401k’s. Why, sure its cheaper for companies and one of the big reasons is that in our quest for “transparancy” new accounting standards have imposed new reporting rules which has crippled corporate balance sheets. We are strangling our companies with regulations. We are forcing them to compete with foreign competitors with both arms tied behind their backs. You may not have liked the old boys club, but I think we were all better off back then.

It’s unfortunate that AB will disappear and the moreI
read about InBev the more I think about Daimler-Chrysler.
The $65 or more cash price will create a lot of cash locally and
substantial tax revenues. Although the world is changing and everything is becoming more competive, our weak dollar is coming home to haunt us.

n thinking about how shareholders, especially those who don’t live here will deliberate on this, I had one thought that would favor them electing to sell. As this drags out over the summer, if it appears Barak F. Obama is going to win, I predict many AB shareholders will decide to sell while capital gains rates are still at 15%. Obama has said he will raise the capital gains rate, although he is being predictably coy about the level. Most analysts are predicting 25%. The big insitutional investors, who hold millions of shares won’t have a choice. Say you bought a million shares at 40. Saving ten percent on your gain of $25 million would be $2.5 million. In a weak stock market, it would be hard to justify not taking that while it is available.