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InBev chief feels heat
POST-DISPATCH WASHINGTON BUREAU
WASHINGTON — InBev CEO Carlos Brito got a frosty reception on Capitol Hill Tuesday, as the Belgian beer executive took his case for an Anheuser-Busch Cos. takeover to Missouri lawmakers. Brito declined to set a timetable for A-B to respond to its $47.5 billion cash offer and would not confirm reports that investment guru and billionaire Warren Buffett supported the deal. Buffett's Berkshire Hathaway owns a 5 percent stake in Anheuser-Busch. In recent days, news reports have sparked speculation about the role Buffett might play in the drama between A-B and InBev. "Because he carries such an enormous reputation, he could make more out of his opinion than 5 percent," said Andy Kilpatrick, who has written two books on Buffett. Belgian newspaper De Standaard reported Tuesday that Buffett supported InBev's takeover of Anheuser-Busch, though the article cited no source, according to media reports. After weeks of speculation, InBev made its unsolicited bid for A-B public last week. "Right now what we're trying to do really is to engage (A-B's) board," Brito said. "We trust their board and their shareholders, and we're pretty sure they'll do the right thing." Asked whether InBev would increase its $65-a-share offer, Brito said: "65's a great price, full price, so that's it." Brito's Washington meetings represented a new phase — one of political rather than financial persuasion — in the beer giant's campaign to acquire the St. Louis brewer. He is scheduled to meet today with Sen. Christopher "Kit" Bond, R-Mo., and Rep. Todd Akin, R-Town and Country. To be sure, Brito faces at best a hard sell with Missouri lawmakers; McCaskill, Bond and others are strongly opposed. Bond's office last week sent a letter to federal regulators, urging them to "scrutinize closely" the deal for signs that it would unfairly limit competition in the U.S. beer market. Gov. Matt Blunt on Monday followed suit. Such antitrust concerns could stall, or even halt a merger — but financial analysts and antitrust attorneys say that is unlikely. A-B held a 50.9 percent share of the U.S. market in the first quarter. InBev has only a tiny slice of the U.S. market, and a big chunk of that business is derived from a distribution deal with Anheuser-Busch. "InBev has carefully considered the antitrust issues, and we are confident the transaction will be approved" by U.S. regulators, said spokeswoman Marianne Amssoms in an e-mail. Jack Russo, an analyst with Edward Jones, said he agrees the deal shouldn't raise any significant antitrust issues. "Since this was announced, there's a kind of 'protect an American icon brand from foreign ownership' type of mentality going on here. … With politicians, that's a pretty typical response," he said. "But at the end of the day, this is likely to be a business decision, and all the emotion will be kept out of it." McCaskill spokeswoman Adrianne Marsh on Tuesday said the senator plans to send a letter to A-B's board of directors, urging them to reject the deal. "I was very upfront," McCaskill said of her discussion with Brito. After offering him a Budweiser and sipping one herself, she told him she would "do everything I could to stop this sale from going through. … It's a bad idea. I don't want you to buy it. The people of Missouri don't want you to buy it." McCaskill blasted the deal as one designed to give "premium profit for hedge fund investors." She said A-B is a strong company that has provided thousands of good middle-class American jobs. "This is not a company that's in stress." Addressing concerns about a foreign firm taking over an American icon, she added: "We do not have a 'For Sale' sign on our front lawn in America." Brito is likely to hear a similar anti-foreign-takeover refrain from Bond and Akin, who oppose the deal. Reps. Russ Carnahan, D-St. Louis, and William Lacy Clay, D-St. Louis, also oppose the deal, said their respective spokesmen. Brito said he believed InBev could address the political opposition. And indeed, McCaskill conceded that "it's very unclear that any of us can do anything" to stop the deal. She said she hoped A-B would "take a long, hard look at what this means to the company and the culture" and reject the offer. She said she has not talked to A-B officials about the deal. "The company has been very tight-lipped," she said, and "appropriately cautious." Companies that are on the verge of being taken over sometimes raise the spectre of a lengthy antitrust hang-up as a defense — or as leverage to get the raiding company to increase its offer, say antitrust experts. Such arguments may have little to do with the merits of a case. InBev could choose to circumvent the antitrust argument by unilaterally seeking a stamp of approval from U.S. regulators, even before A-B responds to its offer. One-party filings for approval under antitrust law Hart-Scott-Rodino Act are routine. "It would be a smart move," Russo said. "It would certainly remove a lot of the emotional noise … and riffraff that we've heard today and likely will hear for a while." Amssoms said InBev "will file at the appropriate time under the Hart-Scott-Rodino Act." She declined to elaborate on just when that would be. Sarah Lohman and Tim Logan of the Post-Dispatch contributed to this report. dshesgreen@post-dispatch.com 202-298-6880 rmelcer@post-dispatch.com | 314-340-8394 |
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