Anheuser-Busch Surges on Report InBev May Make Bid

Anheuser-Busch Surges on Report InBev May Make Bid

May 23 (Bloomberg) -- Anheuser-Busch Cos., the maker of Budweiser beer, jumped to a record in New York trading on a report that it may receive a bid valued at $46 billion from larger brewer InBev NV.

St. Louis-based Anheuser-Busch, whose second-largest shareholder is Warren Buffett's Berkshire Hathaway Inc., rose $3.50, or 6.7 percent, to $56.08 at 1:17 p.m. in New York Stock Exchange composite trading, the biggest gain in seven years. InBev, the world's largest brewer, fell 1.44 euros, or 2.9 percent, to 48.88 euros in Brussels.

InBev, the maker of Stella Artois beer, is working on a bid valued at $65 a share for Anheuser-Busch, the Financial Times' Alphaville blog said today, citing executives and bankers it didn't identify. The combination would create a company that distributes one-fourth of the world's beer and allow InBev to expand in the U.S., where Anheuser-Busch controls almost half the market.

``The two companies would represent an excellent geographic fit,'' Wim Hoste, an analyst at KBC Securities in Brussels, said in a telephone interview. ``The black hole for InBev is the U.S. Buying Anheuser-Busch would fill up the last major hole in their geographic portfolio.''

InBev spokeswoman Marianne Amssoms declined to comment on the report. Anheuser-Busch Chief Financial Officer Randolph Baker said in a statement the company doesn't comment on rumors.

InBev dethroned St. Louis-based Anheuser-Busch in 2006 as the world's largest brewer by sales. Revenue in 2007 was 14.4 billion euros ($19.7 billion), while Anheuser Busch had $16.7 billion in sales.

Budweiser, Michelob

Anheuser-Busch makes Bud Light and Michelob beers. Together, the two companies would control about 25 percent of the world's beer market, analysts at Bear Stearns Co. estimated last year.

InBev, based in Leuven, Belgium, is considering an approach to Anheuser-Busch Chief Executive Officer August Busch IV and a subsequent appeal to the U.S. company's board, the Financial Times blog said. InBev may make a public appeal to Anheuser-Busch shareholders if it's refused, the report said.

The brewer no longer has a staggered board, one of the traditional defenses used for a takeover.

While extensive preparations have been made, a bid from InBev isn't imminent, the Financial Times blog said. Financing for a deal, which may approach $50 billion, has been provisionally arranged with JPMorgan Chase & Co. and Banco Santander SA, the report said.

Lazard Freres

InBev may issue $10 billion to $17 billion in securities to its investors in about 12 months to pay down a bridge loan, the Financial Times blog said. Lazard Freres SAS is leading the advisory team, it said.

A Santander spokesman, who asked not to be identified by name, declined to comment. J.P. Morgan spokesman Brian Marchiony declined to comment.

Berkshire Hathaway owned 35.6 million shares, or 5 percent of outstanding Anheuser-Busch stock, as of March, according to Bloomberg data. Barclay's Plc is the biggest stakeholder, with 43.7 million shares.

Berkshire spokeswoman Jackie Wilson had no immediate comment.

Both already have some ties. Anheuser-Busch imports some of InBev's top-selling European beers, including Stella Artois, Bass, Beck's and Hoegaarden. In May 2006, InBev sold its Rolling Rock brand to Anheuser-Busch for $82 million.

InBev and Anheuser-Busch have little geographic overlap. InBev dominates Brazil and has large operations in Europe and China. The merger would help them compete with SABMiller Plc and Molson Coors Brewing Co., which are combining their U.S. operations.

Savings from the combination may total $1.4 billion annually by 2011, the blog reported.

BLOOMBERG