The boards of both the St. Louis-based Anheuser-Busch and InBev have approved the all-cash deal, according to a joint statement released today (Monday).

Anheuser-Busch’s popular Budweiser and Bud Light beers will join InBev’s stable of beers that includes such well-known brand names as Stella Artois, Beck’s and Brahma. The resulting merger will produce the largest beermaker by volume, as the newly formed entity will surpass the current title-holder, the British-owned SAB Miller PLC (OTC: SBMRY).

“Together, Anheuser-Busch and InBev will be able to accomplish much more than each can on its own,” InBev Chief Executive Officer Carlos Brito, who will helm the new company, said in a joint statement. “We have been successful business partners for quite some time, and this is the natural next step for us in an increasingly competitive global environment.”

The takeover battle has been hotly contested for months in both the boardroom and the courtroom since InBev’s original $46 billion offer for Anheuser-Busch in May. Fierce opposition from the board, led by Chief Executive Officer August Busch IV, was finally overcome by InBev’s bid increase of 7.7% and the Belgian brewer’s agreement to name the newly formed global entity Anheuser-Busch InBev.

“This is about giving InBev a U.S. presence and this is the most effective way they can see to achieve that,” Grant Saligari, a beverage industry analyst at Commonwealth Securities Ltd. in Sydney, told Bloomberg News. “Consumers are very emotionally attached to their beers. A peaceful deal helps maintain that.”

Aneheuser-Busch and InBev Merger Just One of Many

This merger is the latest in a string of consolidations in the largely mature global beverage industry, as skyrocketing grain costs and softening economies have led struggling brewers to seek economies of scale. Two of the largest brewers, InBev and SAB Miller, are themselves creations of mergers that took place within the past 10 years, The New York Times reported.

In January, Carlsberg A/S and Heineken N.V. (HINKY) agreed to buy Scottish & Newcastle PLC for $15.4 billion. Late last year, British-owned SAB Miller PLC (OTC: SBMRY) and Canada’s Molson Coors Brewing Co. (TAP), agreed to merge their U.S. brewing operations.

Once InBev acquires Anheuser-Busch, it will leave The Boston Beer Co. Inc. (SAM), maker of the popular Samuel Adams beer brand, one of the last large domestic brewers still under U.S. ownership.

Source: InBev Finally Woos Anheuser-Busch with Higher Offer, Top Billing

As a sign of the times, InBev’s Chief Executive Carlos Brito did it with style – appearing on an interview-style video on InBev’s web site that directly addresses the fears of the legion of Anheuser workers and drinkers – jobs, foreign ownership, brand synergy.

“I think what’s in important here is that Budweiser the beer will continue to be brewed in the same brewers – we don’t have plans to close any brewers – by the same people according to the same recipe,” Brito said. 

The proposed merger, which appraises Anheuser at a 35% premium, is a combination of high performance and common sense, he said.

“This company is going to be the world’s leading brewer,” Brito noted, calling the merger a natural step. “It’s going to be among the top five consumer goods companies in the world.”

InBev’s line of beers includes Stella Artois, Beck’s, Hoegarden and Brahma.

Anheuser is the maker of Budweiser, Busch and Michelob brands. It also owns a 50% share in Grupo Modelo, Mexico’s leading brewer, and a 27% share in China brewer Tsingtao, whose namesake beer brand is the country’s best-selling premium beer.

News of the proposal sent shares of both companies up in morning trading today (Thursday). And that’s a more elemental to the proposal than before now that the long-time Busch family-run brewer owns only 3.5% of the company’s shares.

Instead, the top shareholder is Warren Buffet’s Berkshire Hathaway (BRK.A, BRK.B) with a 5% stake. And with controlling power dispersed, it’s much easier for shareholders to push the deal through.

Anheuser-Busch said in a statement that its board of directors will evaluate the proposal carefully and in the context of all relevant factors, including the company’s long-term strategic plan.

“The board will pursue the course of action that is in the best interests of Anheuser-Busch’s stockholders” and “expects to make its determination regarding InBev’s proposal in due course.”

Beverage Providers Stirring Global M&A

Yesterday, (Wednesday), Merrill Lynch & Co. Inc. (MER) analysts said that Foster’s Group Ltd. (OTC: FBRWY) – Australia’s biggest beer and wine maker – may be a takeover target after it conducts a review of its wine business.

Earlier this week, Foster’s cut its earnings forecast and announced a $730 million write-down of its wine unit, causing Chief Executive Officer and Executive Director Trevor Louis O’Hoy to announce his resignation from his post.

Should Foster’s put itself on the block, it would join Anheuser, InBev and other major global beverage providers that have been on the giving and receiving end of billion-dollar buyout offers.

In March, France’s Pernod Ricard SA won a highly contested auction to buy V&S Group – makers of Absolut vodka and Cruzan rum – from the Swedish government for $8.9 billion.

In January, Carlsberg A/S and Heineken N.V. (OTC: HINKY) agreed to buy Scottish & Newcastle PLC for $15.4 billion.

And late last year, British-owned SAB Miller PLC (OTC: SBMRY) and Canada’s Molson Coors Brewing Co. (TAP), agreed to merge their U.S. brewing operations.

Source: InBev Offers Anheuser $46.3 Billion, a Deal That Would the Create World’s Largest Brewer

European beermaker InBev is the world’s largest brewer. Its stable of beers includes such well-known names as Stella Artois, Beck’s and Brahma.

“The two companies would represent an excellent geographic fit,” Wim Hoste, an analyst at KBC Securities, part of KBC Groep NV in Brussels, said in a telephone interview with Bloomberg News. “The black hole for InBev is the [United States]. Buying Anheuser-Busch would fill up the last major hole in their geographic portfolio.”

Should the two brewers merge, the resultant entity would be a globally focused player that sends out 350 million hectoliters of beer annually and generates approximately $20 billion in annual revenue, MarketWatch reported.

Analysts are already expecting opposition from Anheuser’s fiercely independent President and Chief Executive Officer August Busch IV. But if Busch refuses to commence friendly talks, InBev would then be prepared to go straight to key shareholders with its $65 per share bid, The Financial Times’ Alphaville blog reported, citing unnamed sources.

Management opposition isn’t the only problem that could derail this merger, Craig Hutson, an analyst at GimmeCredit.com, said in a MarketWatch report.

“The cultures are vastly different,” Hutson said. “Anheuser-Busch was founded by a family that has deep beer roots and a focus on building brands and treating its employees well. Inbev is a global amalgamation of acquisitions that is intently focused on reducing costs while incentivizing employees to drive higher profits.”

Hutson wrote that, while a deal would be “a good geographic and product fit, we believe there are too many impediments.”

Shares of Anheuser-Busch gained $4.03 each, or 7.66%, to close at $56.61 on Friday. The stock has traded between $45.55 and $58.00 in the past 52 weeks.

The proposed merger is the latest in a string of consolidations in the largely mature global beverage industry. In January, Carlsberg A/S and Heineken N.V. (HINKY) agreed to buy Scottish & Newcastle PLC for $15.4 billion. Late last year, British-owned SAB Miller PLC (OTC: SBMRY) and Canada’s Molson Coors Brewing Co. (TAP), agreed to merge their U.S. brewing operations.

If Anheuser-Busch is acquired by InBev, it will leave The Boston Beer Co. Inc. (SAM), maker of the popular Samuel Adams beer brand, as one of the last large domestic brewers that still has American ownership.

Source: Global Beer Titan InBev to Make $46 Billion Offer for No. 1 U.S