It's over, folks: Buffett backs Budweiser sale - Top Stocks Blog - MSN Money
 
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It's over, folks: Buffett backs Budweiser sale

Posted Jun 17 2008, 01:30 PM by Anthony Mirhaydari
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In a surprising move, Warren Buffett told the Belgian newspaper De Standard this morning that he supports InBev's $46 billion cash offer for Budweiser brewer Anheuser-Busch. His Berkshire Hathaway owns some 35 million shares, or a 5% stake in the iconic beer maker.

The endorsement comes as a bit of a slap in the face for Anheuser CEO August Busch IV, who was trying to buy some time as indicated in this formal response sent to InBev yesterday. In fact, the Oracle of Omaha was going to grace Mr. Busch with his presence later this week to talk the deal through.

Anheuser-Busch shares rose 1.1% to $61.20 today and are up 34% since mid-March as takeover speculation has grown.

Could Mr. Buffett be positioning himself as the vanguard for a shareholder coup? No doubt many would like to avoid the Yahoo debacle we all just witnessed. And he recently demonstrated his deal closing abilities as a critical part of the Mars acquisition of Wrigley's. Other shareholders will likely be influenced. After all, who wouldn't want to stand shoulder-to-shoulder in a deal with the world's richest man?

The opposition seems decidedly less impressive. Certainly, popular support continues to rally in St. Louis, where the local community is trumpeting its opinion with a chorus of "Hell no, Bud won't go." But in reality, things look bleak. Recent changes to Anheuser's corporate governance policy weaken its anti-takeover defenses. Moreover, the history of August Busch IV doesn’t exactly impart confidence; instead, it reminds me of the blighted past of one George W. Bush.

Speaking of politics, Missouri Governor Roy Blunt, a vehement opponent of the deal, is the wildcard. He has already asked the Federal Trade Commission to review the deal, saying that he is "concerned that this sale would have destabilizing impacts on our nation and state's long-term economic interests."

When it comes down to it, American's just don’t like the idea of foreigners buying our stuff, as Barron's outlined in this excellent piece over the weekend. InBev CEO Carlos Brito was in Washington D.C. today trying to placate some of these feelings. I hope he brought along a few bottles of Beck's and Stella Artois -- he'll need them.

I'll have more on Anheuser's strategic alternatives in a post later this week.

Previous posts:

Will Budweiser become Belgian?

The sinfully bullish case for Anheuser-Busch

(Disclosure: I don't own any shares of the companies mentioned.)

Comments

 

If you can't defeat the most pwerfull nation in the world militarily you can still defeat them over time by slowly letting them destroy themself from within. The old 100 year plan first proposed by the chinese communist in the 50's. Corrupt them morally, divide them racially and then baknrupt them financially. 50 years left on the plan but it seems to be working.

Buffet only cares because he will make millons hes just like the rest of the scum bags wanting to sell America, keep driving foriegn made cars and everything else u can get your hands on, the profit goes overseas so they can continue to buy America, its our fault.

Come on we are selling out the Greatest Country in the world!

stop drinking it...if you can...

I hope wal-mart is next! let's face it it is business and this stuff happens everyday on a smaller scale. We live in a big global society that means everyone is open to the same type of action. If a-b had grown there stock value instead of tread water or lose they may have been able to avoid such a deal. Sales speak for them selves the so called great american icon has been sliding for years. It seems the slide will now become a free-fall

Hey, it works for the boards, Ceo's, Cfo's etc and there golden incentives....and in this case, for me........I'm out in good style and a fat account.  Far from what BUD offered me the last 10 years or so.....

And a good thing for Warren too.....of course

"This Bud's for you " is as American as apple pie.

I guess no more. Is there an American brand left if Bud goes?

Well, you voted for Bush, that's what you get. The writings were on the wall and you still decided to go with a President that set this country back 30 years!!!

Hope is on the way though...

Although this sybmolizes a lot, in reality this is JUST A BEER COMPANY, not a threat to national security!  Its shares are held by people who made and investment and now want want those shares to be worth as much as possible.  If they want to sell their shares to a foreign company who wants to pay an absurd amount for them, this shouldn't be restricted.  How would you like it if someone from Belgium wanted to buy your house for $100K more than it's listed, but the government wouldn't let you sell it to them because they are a "foreigner".   I write this from China.  Wake up america and get back to work.  The reason the rest of the world is kicking our asses is that we think we can just go along as always and ignore that we live in a global economy where there are lots of people willing to work very hard.

The beer deal should not be stopped.

Hey, this is the nature of our global, free-market economy.  Um, let's see - didn't some German immigrants start this company?  What's the big deal?  Bud sux anyway; I have been drinking Stella for a year now as a successor to my long-time favor of the Heineken flavor.  At least this infusion of money will keep AB workers working.

Of course, if you aren't happy about it, you could always find a little more than $46 billion and buy the company yourself.....

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