InBev → Anheuser-Busch
InBev's $52bn all-cash takeover of Anheuser-Busch — unsolicited at $65 a share, agreed at $70 — put Budweiser under Belgian-Brazilian ownership, created Anheuser-Busch InBev, the world's largest brewer, and was financed with $45bn of bank debt.
A hostile approach turned agreed at $70 a share, creating Anheuser-Busch InBev.
- Value
- $52B
- Announced
- June 2008
- Completed
- November 2008
- Sector
- Consumer
- Deal type
- acquisition
- Acquirer
- InBev (Belgium)
- Target
- Anheuser-Busch (United States)
Why it mattered
InBev, formed in 2004 when Belgium's Interbrew merged with Brazil's AmBev, was already the world's biggest brewer by volume. Anheuser-Busch, controlled by the Busch family since 1880 and the largest US brewer since 1957, was the biggest by revenue and owned half of Mexico's Grupo Modelo and 27% of China's Tsingtao. On 12 June 2008 InBev offered $65 a share, about $46bn. Anheuser-Busch rejected it on 25 June; InBev went to court in Delaware to let shareholders remove the board, and Anheuser-Busch sued to stop InBev canvassing them.
On 13 July the two sides agreed at $70 a share, an equity value of $52bn. InBev's Carlos Brito would run the combined group, August Busch IV would join its board, St. Louis would stay the North American headquarters and every US brewery would remain open. InBev promised at least $1.5bn a year of savings by 2011. Banks including Santander, Barclays, Fortis and the Royal Bank of Scotland committed $45bn of debt, including a $7bn bridge to be repaid from disposals of non-core assets, and up to $9.8bn of equity bridge. The US Department of Justice cleared the deal after InBev agreed to license the Labatt brands in the United States to an independent buyer, and it closed on 18 November 2008.
What it left behind
The cuts came fast: 1,400 jobs, zero-based budgeting, supplier payment terms stretched to 120 days. Assets were sold to pay down the banks — the Tsingtao stake, the Korean brewer to KKR for $1.8bn and the Busch Entertainment theme parks, including SeaWorld, to Blackstone for up to $2.7bn — and group debt fell from $56.6bn in 2008 to $30.1bn at the end of 2012. Grupo Modelo fought the takeover in arbitration and lost in 2010; AB InBev bought the rest of it for $20.1bn in 2013 but had to hand the US rights to Corona and Modelo to Constellation Brands, and in 2016 it bought SABMiller. In May 2023, during a boycott of Bud Light, Modelo Especial overtook it as the best-selling beer in the United States by retail dollar sales. The pattern — buy a cash-rich incumbent, cut hard, deleverage, buy again — creates value only while the brands being milked keep their customers.