What Do You Think About the Possible Anheuser-Busch Buy-Out?

Question

This is my take: http://rking2.blogspot.com/

In your opinion would InBev buying Anheuser-Busch be positive, or negative?

What do you think the ramifications (if any) will be if InBev buys Anheuser-Busch?

Thanks for your input!

Answer 1

I think that A-B has done enough damage since August IV started his "reign".  The irony is that a large number of those eligible to vote on the takeover are the very ones that were forced into early retirement or pushed out of the organization to make room for his friends and political pawns.  This company has needed a "Come To Jesus" slap in the face for a while.  They destroyed a lot of good and loyal employee's lives and new management is sorely needed,

Answer 2

NO. Just as I don't buy Coors or Miller. Heres why...... American companies are suffering the ill - promise that Osama Bin Laden made back during the 9/11 attacks. Ever since that time, ALL American corporations have suffered:

Banks (all seemingly mergered together to the point now where its really hard to get a decent loan.)

Automotive (all suffering BIG time as the oil prices rise and control of the worlds oil supply goes to China, the REAL #1 enemy of the US)

Food & Beverage (seems like just yesterday I could go out and buy tomatos without fearing for my life.)

Even Entertainment (what ever happened to real talent, seems like everyone with a computer thinks they are the next big artist or movie star.)

And the list goes on and on and on. On a global scale, the U.S. imports more goods and services than it exports out. And that my friends creates a HUGE problem. Afterall, if all the U.S. companies start falling under "conglomerate umbrellas" then that means (by economic standards) there will be fewer and fewer jobs available to the citizens in this country. Thus by meaning less "imported" goods will be purchased (seeing as of the present the U.S. alone is the worlds larger consumer country.) And from my understanding of InBev, they are a company that practices Time Warner style moves (in other words, obtaining companies, buying them out or taking them over, ejecting all management there currently, then shutting down the plants and offices as to make a stock ticker go up a bit.)

I will really be happy when these CEO's stop getting their MBA's and Law Degrees from the "Mickey Mouse Club school of taking care of your own" and start acutally learning something in these programs. I mean its not that hard to understand.... is it???

This is the reason that its not a good ideal to have a "Global Economy". Anyone with half a brain could have predicted that expanding the stock and investments globally would cause American companies to become "EXTREMELY" vunerable. h**l there are so many wealthy airs to throwns throughout the world that are not too fond of America. And you know thier thoughts went something like this: "Whats the best way to get back at those ******* Americans.... hmmm lets see they do have an excessive lifestyle and consume a lot (food, consumer products, drugs, services.) Gee I wonder if we could literally control the markets which they consumer services and products. That would make them need us more than we need them, thus giving us power to control their way(s) of life. YES THATS A GREAT IDEA!"

Think people, THINK!

Answer 3

I think that sh** is whack as h**l. Anheuser Bush that's sopposed to always stay Saint Louis!!!!!!!

Answer 4

Q: If InBev is offering such an excellent price for my A-B stock, doesn’t everybody win?

A: Shareholders might experience solid returns from their shares initially if the takeover goes through at $65 a share. But there are tradeoffs. InBev’s buyout record in Europe and Canada shows that workers and communities that depend on Anheuser-Busch could suffer from a possible erosion of working conditions and even layoffs. And, while InBev’s plans for Anheuser-Busch aren’t clear, the general consensus on Wall Street is that InBev is offering an exorbitantly high price for Anheuser-Busch, and would then be under heavy pressure to service its debt by selling assets and slashing costs.

Q: Would InBev cut jobs or employee benefits at A-B?

A: To recoup the huge purchase price, experts say that InBev would probably have to cut Anheuser-Busch’s operations to the bone. If the pattern InBev management has followed overseas is any clue, labor costs will likely be one of the first places it will seek to make cuts. That could mean layoffs, wage cuts, higher worker health care costs, poorer health benefits, or decreases in future pensions.

One analyst told MarketWatch, “InBev is run by a bunch of machete-wielding investment bankers who go around and cut costs wherever they can.” Such an approach, the analyst speculated, could leave the new owners with what the analyst described as a “demoralized work force and tarnished brands.” vi

Q: Could InBev break up Anheuser-Busch and sell it off?

A: Another option for InBev to pay back its loans after buying Anheuser-Busch would be to sell off some parts of the company. Some banking experts say if InBev pays top-dollar for Anheuser-Busch, it would be left with few other choices. “There must be a break-up of the company” in such a case, one banker said. vii

Q: Wouldn’t a buyout be good for Anheuser-Busch?

A: Consumers and the American public see Budweiser as the last of the great American beers. The Wall Street Journal calls Anheuser-Busch “a potent symbol of Americana.” viii  But it’s more than patriotism that gives people pause about the InBev buyout. Workers don’t always fare well when outside conglomerates buy breweries. Since South Africa Breweries (SAB) took over Miller Brewing’s U.S. operations, it has demanded hikes in workers’ health care costs, elimination of overtime after eight hours, elimination of seniority rules and drastic cuts in staffing levels. At the three Teamster-represented Miller breweries, we successfully fought back those demands during contract negotiations; but those demands were implemented at the non-Teamster breweries. We don’t want that to happen at Anheuser. Communities that depend on Anheuser-Busch would suffer if InBev makes cost cuts—including St. Louis, where 6,000 people work at Anheuser and A-B contributes millions to the tax base, local businesses, education, and charities like the Red Cross. ix  

Q: Aren’t mergers good for companies in general?

A: Mergers initially make stock prices rise, but, as a recent New Yorker article put it, “… corporate marriages only rarely end in bliss. A KPMG study of 700 mergers found that only 17 percent created real value, and that more than half destroyed it.” x

Anheuser is likely to resist any takeover bid from InBev. While this may drive prices up temporarily, A-B’s long-term future could be at risk. The Wall Street Journal points out, “If the price went that high, InBev would need to wring steep cost cuts out of Anheuser to make the combination financially viable, possibly slashing expenses by more than $1 billion over a few years. That could mean sharp reductions in Anheuser's marketing budget and large numbers of layoffs, analysts say.” xi  

Q: Where does the Busch family stand on an InBev buyout?

A: The Busch family founded Anheuser-Busch, and are still key shareholders, executives and directors of the company. In recent years the family relinquished much of its control over the company, and family members on the board of directors only control 3.5 percent of common stock. However, the family’s influence on the board is reported to be strong. xii   It appears that CEO August Busch IV would fight any takeover attempt. xiii  

InBev’s Management Style: Layoffs, Longer Hours and Plant Closures

InBev has adopted AmBev’s Brazilian management style of extensive cost-cutting and “incentive-based” employee compensation. It operates under a “World Class Efficiency” system that stresses raising “efficiency” and slashing costs—including labor costs. The company’s management techniques are partly borrowed from corporations such as Wal-Mart. xiv  

InBev laid off hundreds of workers in plants in Europe and Canada, and has rocky relations with its employees and unions. xv  Belgium workers struck over attempts to enforce longer work hours, close breweries and lay off hundreds of employees.

When workers at its Newfoundland Labatt plant went on strike, InBev hired an outside security force. The union described InBev’s management as “a bunch of Brazilian bullies who think they can teach our workers a lesson.” xvi InBev closed Labatt’s Toronto brewery, wiping out 265 jobs. And in Brazil, InBev was sued for making “underperforming” workers do push-ups or silly dances, or answer to demeaning nicknames like “Forrest Gump.” xvii

Answer 5

Can't tell if the ramifications would be good or bad.  Maybe a little bad as InBev would certainly start cutting all over the place to make AB more profitable, but long term that isn't such a bad thing.  I think its very interesting that InBev can make this offer, says something about how weak the dollar is right now.