^ If so, A-B's is going to see its stock price drop sharply. They need InBev, because InBev has great beer and branding. A-B just has a strong brand which isn't enough. Merging with InBev is the lesser of two evils for A-B but the board is probably too stubborn to see it.
For those who want to see AB both stay independent and grow an international level, those whole mess might be for the best, finally forcing AB to make some major moves internationally. AB can go it alone, but it is quickly loosing its window.
40% eh? I wonder what percentage of AB is owned by St. Louis area residents and whether that block itself would be enough to hold such a deal back.
40% eh? I wonder what percentage of AB is owned by St. Louis area residents and whether that block itself would be enough to hold such a deal back.
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Good, it seems the tide is turning. I would really hate to see this go through.
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innov8ion wrote:^ 10% and one vote extra.
Berkshire would never buy a controlling interest in A-B.
Yeah, probably not. While he could afford to buy the whole company, he won't do it on the open market. As soon as word got out that he was buying (which would happen if he was to buy a majority interest), the price would go through the roof. And he won't engage in auctions.
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Why this won’t happen:
- If they take over AB, I believe they will be beyond capacity for steady operational management; the company would just be too big.
- As has been noted, the Board of Directors of AB isn’t interested in selling the company, as well as Busch IV and Stokes not wanting to see the company go away.
- InBev would have to pay a considerable premium for the stock, north of $65, to appease stockholders. Therefore, they would either be under an extremely heavy debt burden, be out most of their in-house cash, and / or both to navigate the takeover. And in this economy, you don’t want to put yourself too firmly into a leverage noose.
- Perceptions of foreign ownership could lead to a loss in intangible assets related to brand strength and valuation.
- I don’t think Buffett bought AB for a buyout, and he’d want more than $65. The future earnings valuations for the company may not justify it. Fair to assume that other institutional shareholders aren’t looking to sell or see an ownership swap that doesn’t add up to their long-term asset accumulation strategies, buyout or not.
Focus: I believe that InBev doesn’t want AB for the US market as much as for its entry points into China.
AB has been able to gain a sizeable amount of the Chinese market share, including acquisitions of Harbin and Tsing-Tao, as well as the establishment of a major brewery in Wuhan. The Chinese drinking demographic is based on drinking hard alcohol, but this general trend is being influenced by external companies, such as AB, making new product available (and the majority of domestic Chinese beer is simply awful) and investing heavily into advertising and product promotions. With 1.3 Billion potential consumers, and with entry points into markets across East Asia, whoever wins the Chinese market wins net global market share.
- If they take over AB, I believe they will be beyond capacity for steady operational management; the company would just be too big.
- As has been noted, the Board of Directors of AB isn’t interested in selling the company, as well as Busch IV and Stokes not wanting to see the company go away.
- InBev would have to pay a considerable premium for the stock, north of $65, to appease stockholders. Therefore, they would either be under an extremely heavy debt burden, be out most of their in-house cash, and / or both to navigate the takeover. And in this economy, you don’t want to put yourself too firmly into a leverage noose.
- Perceptions of foreign ownership could lead to a loss in intangible assets related to brand strength and valuation.
- I don’t think Buffett bought AB for a buyout, and he’d want more than $65. The future earnings valuations for the company may not justify it. Fair to assume that other institutional shareholders aren’t looking to sell or see an ownership swap that doesn’t add up to their long-term asset accumulation strategies, buyout or not.
Focus: I believe that InBev doesn’t want AB for the US market as much as for its entry points into China.
AB has been able to gain a sizeable amount of the Chinese market share, including acquisitions of Harbin and Tsing-Tao, as well as the establishment of a major brewery in Wuhan. The Chinese drinking demographic is based on drinking hard alcohol, but this general trend is being influenced by external companies, such as AB, making new product available (and the majority of domestic Chinese beer is simply awful) and investing heavily into advertising and product promotions. With 1.3 Billion potential consumers, and with entry points into markets across East Asia, whoever wins the Chinese market wins net global market share.
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So, what exactly would a takeover mean to St. Louis?
JuiceInDogtown wrote:So, what exactly would a takeover mean to St. Louis?
I don't know since I'm not inside.
My guess is all the Sunset Hills based IT jobs would go away.
Half of the South Broadway jobs would disappear.
I think the brewery is safe because supposedly the late 90's/early 00's renovations made the plant pretty efficient.
That's what a couple of ex-AB contractors I work with are guessing. (They did their 5 year stints in the IT department and were let go.)
http://snipurl.com/2b912
NEW YORK (Reuters) - A member of the founding family of Anheuser-Busch Cos <BUD> said any talks with Belgian brewer InBev NV <INTB> should be based on shareholder value rather than the Busch family's legacy, the Wall Street Journal reported on Thursday.
The comments signal a hardening of the split within the family, which could embolden InBev to make a bid for the St. Louis brewer, the newspaper said.
InBev is weighing a bid that could top $45 billion, the Journal reported, citing people familiar with the matter.
"A possible merger is not a family issue," Adolphus Busch IV wrote in a release to the newspaper. It is not "a matter of family solidarity or legacy. It is strictly a matter of shareholder value.
"It is no secret that the sluggish performance of the stock is a concern."
....
Adolphus Busch also said the views of Warren Buffett would play a major role in whether a deal occurs. Buffett's Berkshire Hathaway Inc <BRKb> is the brewer's second-largest shareholder with a stake of below 5 percent.
Buffett "has a notable reputation for assisting in matters where family ownership is at stake," Adolphus Busch was quoted as saying. "Should Mr Buffett see this merger as a positive action for all shareholders involved, the likelihood of a deal will increase enormously."
NEW YORK (Reuters) - A member of the founding family of Anheuser-Busch Cos <BUD> said any talks with Belgian brewer InBev NV <INTB> should be based on shareholder value rather than the Busch family's legacy, the Wall Street Journal reported on Thursday.
The comments signal a hardening of the split within the family, which could embolden InBev to make a bid for the St. Louis brewer, the newspaper said.
InBev is weighing a bid that could top $45 billion, the Journal reported, citing people familiar with the matter.
"A possible merger is not a family issue," Adolphus Busch IV wrote in a release to the newspaper. It is not "a matter of family solidarity or legacy. It is strictly a matter of shareholder value.
"It is no secret that the sluggish performance of the stock is a concern."
....
Adolphus Busch also said the views of Warren Buffett would play a major role in whether a deal occurs. Buffett's Berkshire Hathaway Inc <BRKb> is the brewer's second-largest shareholder with a stake of below 5 percent.
Buffett "has a notable reputation for assisting in matters where family ownership is at stake," Adolphus Busch was quoted as saying. "Should Mr Buffett see this merger as a positive action for all shareholders involved, the likelihood of a deal will increase enormously."
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^ NOOOOO!!!
If this goes through...
See you later AB IT, Marketing, and Management jobs.
See you later Live on the levee, Which would not be possible without this years 200k donation.
See you later Mardi Gras on the scale it is. AB cut a 50K check for that.
See you later $$$ to various other programs, charities, and events around town in which AB bank rolls.
I am an AB shareholder and I say F! $65 a share. I don't want to lose all that listed above and more. INBev will strip AB clean in order to cut costs and we won't see cheaper beer. Not to mention that INBev is an international company, so not only will the profits be leaving the state, but also the country!
If this goes through...
See you later AB IT, Marketing, and Management jobs.
See you later Live on the levee, Which would not be possible without this years 200k donation.
See you later Mardi Gras on the scale it is. AB cut a 50K check for that.
See you later $$$ to various other programs, charities, and events around town in which AB bank rolls.
I am an AB shareholder and I say F! $65 a share. I don't want to lose all that listed above and more. INBev will strip AB clean in order to cut costs and we won't see cheaper beer. Not to mention that INBev is an international company, so not only will the profits be leaving the state, but also the country!
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innov8ion wrote:http://snipurl.com/2b912
NEW YORK (Reuters) - A member of the founding family of Anheuser-Busch Cos <BUD> said any talks with Belgian brewer InBev NV <INTB> should be based on shareholder value rather than the Busch family's legacy, the Wall Street Journal reported on Thursday.
The comments signal a hardening of the split within the family, which could embolden InBev to make a bid for the St. Louis brewer, the newspaper said.
InBev is weighing a bid that could top $45 billion, the Journal reported, citing people familiar with the matter.
"A possible merger is not a family issue," Adolphus Busch IV wrote in a release to the newspaper. It is not "a matter of family solidarity or legacy. It is strictly a matter of shareholder value.
"It is no secret that the sluggish performance of the stock is a concern."
....
Adolphus Busch also said the views of Warren Buffett would play a major role in whether a deal occurs. Buffett's Berkshire Hathaway Inc <BRKb> is the brewer's second-largest shareholder with a stake of below 5 percent.
Buffett "has a notable reputation for assisting in matters where family ownership is at stake," Adolphus Busch was quoted as saying. "Should Mr Buffett see this merger as a positive action for all shareholders involved, the likelihood of a deal will increase enormously."
A lot to be read there, between the lines. Reminiscent of the recent WSJ/News Corp merger.
A lot of over reaction going on around here and other places. An InBev/AB merger would most likely have relatively little effect on AB's St. Louis presence, at least for the immediate future.
Not sure how I would/will vote. I need to study up on InBev.
A lot of over reaction going on around here and other places. An InBev/AB merger would most likely have relatively little effect on AB's St. Louis presence, at least for the immediate future.
Possibly - see Miller in Milwaukee- BUUuutt the loyalty to StL will be gone. Therefore, if we don't fit into the longterm strategy of InBev, huge numbers of jobs could be cut. Also, a key part of our city's identity would now be at the mercy of outsiders, thereby striking an additional blow to our pathetic regional self esteem and self confidence.
Although the short term effect may not be much, the long term consequences should warrant a significant amount of concern.
Here is a segment from the WSJ on Wednesday by Matt Moffett,
InBev's Belgian executives, analysts and investors -- and the country's political and economic elite -- say they support the company's continued drive for international size and expansion. They also grudgingly acknowledge the company is no longer theirs. InBev "used to be totally Belgian, then it was Belgian-Brazilian, and now it's Brazilian-Belgian," says Economy Minister Vincent Van Quickenborne. "We're a very open economy. We don't have this sense of economic patriotism like the French."
But in building their beer empire, the Brazilians at InBev have rubbed some people the wrong way. Some Belgians, who are connoisseurs of beer much as the French are of wine, have complained that the Brazilians are excessively bottom-line oriented, viewing the suds as a mere product. In 2006, InBev faced strikes and protests in its Belgian operations after announcing a plan to restructure plants and lay off workers. "The Brazilians are very aggressive with the trade unions," says Marc Delvenne, a Belgian union official. "It's always 'no, no, no.'" The company says that it has had "a very strong and constructive dialogue with the unions" and that it minimized the layoffs to 39 posts through internal transfers and an early-retirement program.
So throw in America and you have a 3 legged race!
InBev's Belgian executives, analysts and investors -- and the country's political and economic elite -- say they support the company's continued drive for international size and expansion. They also grudgingly acknowledge the company is no longer theirs. InBev "used to be totally Belgian, then it was Belgian-Brazilian, and now it's Brazilian-Belgian," says Economy Minister Vincent Van Quickenborne. "We're a very open economy. We don't have this sense of economic patriotism like the French."
But in building their beer empire, the Brazilians at InBev have rubbed some people the wrong way. Some Belgians, who are connoisseurs of beer much as the French are of wine, have complained that the Brazilians are excessively bottom-line oriented, viewing the suds as a mere product. In 2006, InBev faced strikes and protests in its Belgian operations after announcing a plan to restructure plants and lay off workers. "The Brazilians are very aggressive with the trade unions," says Marc Delvenne, a Belgian union official. "It's always 'no, no, no.'" The company says that it has had "a very strong and constructive dialogue with the unions" and that it minimized the layoffs to 39 posts through internal transfers and an early-retirement program.
So throw in America and you have a 3 legged race!
This is going to be pretty devastating if this goes down. It is largely the fault of St. Louis though, because between city earnings taxes and a slew of other stupid sh*t this city does, who can prevent companies from being ate up or moving away. Lets face it this city and state are behind the times and operates like a city of the stone age. If those other major corporations leaving the area didn't change anything, hopefully if we lose Busch people will get a chance to step back and make some serious policy changes in this region. If we don't change with the times, its only a matter of time before the St. Louis metro starts losing population. Look at what is happening in Pittsburgh, Cleveland, and Detroit. It looks like we are next in line.
Goat, I don't see what the City or the region has to do with this. It's all dollars and cents, and up to the shareholders. The fact is that while A-B is still a strong company, it's sales and growth have been a bit sluggish.
This P-D article may allay some of your fears (although not knowing much about business, I can't really say that this analysis is correct, but I'm hoping so).
This P-D article may allay some of your fears (although not knowing much about business, I can't really say that this analysis is correct, but I'm hoping so).
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goat314 wrote:This is going to be pretty devastating if this goes down. It is largely the fault of St. Louis though, because between city earnings taxes and a slew of other stupid sh*t this city does, who can prevent companies from being ate up or moving away. Lets face it this city and state are behind the times and operates like a city of the stone age. If those other major corporations leaving the area didn't change anything, hopefully if we lose Busch people will get a chance to step back and make some serious policy changes in this region. If we don't change with the times, its only a matter of time before the St. Louis metro starts losing population. Look at what is happening in Pittsburgh, Cleveland, and Detroit. It looks like we are next in line.
Wow, completely miss the mark much?
This has nothing, I repeat, nothing to do with city earnings tax. Or the city itself, for that matter.
steve wrote:Goat, I don't see what the City or the region has to do with this. It's all dollars and cents, and up to the shareholders. The fact is that while A-B is still a strong company, it's sales and growth have been a bit sluggish.
This P-D article may allay some of your fears (although not knowing much about business, I can't really say that this analysis is correct, but I'm hoping so).
I felt it was a very good analysis. Whether it turns out to be accurate is another question.
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^^Goat, I have to agree with the responses as well...I am not sure how the eTax (or city politics) applies to the employees working at the other 11 AB breweries in the U.S. AB is a publicly traded company...the city could agree to lift all taxes, build them a new downtown building and guarantee a 38 hour work week...and they still would be a candidate for acquisition as they are seen as a commodity to be purchased.
Now, I would be more keen to listen your argument if AB was saying that they were moving their operations to the county or out of state because of issues with the city, but being an acquisition target has absolutely nothing to do with city politics.
Now, I would be more keen to listen your argument if AB was saying that they were moving their operations to the county or out of state because of issues with the city, but being an acquisition target has absolutely nothing to do with city politics.
"The Brazilians are very aggressive with the trade unions," says Marc Delvenne, a Belgian union official.
That tells me two things. 1) Expect a huge culture clash once InBev meets the labor union oriented stl democratic machine and 2) if things get too ugly InBev may cut and run as much as possible if the workers at AB refuse to budge. Someone is going to have to cede some ground, and I bet it will be the AB employees and not InBev management.
Of course, this is all purely speculation.
This has nothing, I repeat, nothing to do with city earnings tax. Or the city itself, for that matter.
As much as some people on this forum hate to take the earnings tax into consideration, it is always worth mentioning simply because it is one more reason for companies to either leave or never come here in the first place. For a multibillion dollar corporation, that 1% is a huge chunk of change.
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realclear wrote:"The Brazilians are very aggressive with the trade unions," says Marc Delvenne, a Belgian union official.
That tells me two things. 1) Either there will be a huge culture clash once InBev meets the labor union oriented stl democratic machine or (and more likely) 2) InBev will cut and run as much as possible if the unions at AB refuse to budge. Assuming InBev will not cede much ground, this will be a tough blow to the workforce at the brewery.
This has nothing, I repeat, nothing to do with city earnings tax. Or the city itself, for that matter.
As much as some people on this forum hate to take the earnings tax into consideration, it is always worth mentioning simply because it is one more reason for companies to either leave or never come here in the first place. For a multibillion dollar corporation, that 1% is a huge chunk of change.
It is also "always worth mentioning" that it has nothing whatsoever to do with this issue.
The earnings tax has no bearing on whether the AB-InBev deal will go down.
That said, the earnings tax could well play a roll in the future as to whether a combined company would continue to keep the Soulard location as a major source of non-beer making employment.
That said, the earnings tax could well play a roll in the future as to whether a combined company would continue to keep the Soulard location as a major source of non-beer making employment.
Law of unintended (well, at least we think they're unintended) consequences: Ever since the BofA flim-flammed the City by giving back options-exercise earnings taxes, the City has lost millions when companies have been bought out and options were exercised (Nestle, the banks). And this one will be the granddaddy of them all, with hundreds of millions in options exercise not being subject to the tax.
Question: How has the City been treating restricted-stock awards vis-a-vis the earnings tax?
Question: How has the City been treating restricted-stock awards vis-a-vis the earnings tax?
The earnings tax has no bearing on whether the AB-InBev deal will go down.
That said, the earnings tax could well play a roll in the future as to whether a combined company would continue to keep the Soulard location as a major source of non-beer making employment.
Exactly. So although the earnings tax may not be worth mentioning in discussing whether the merger will happen, it IS worth mentioning when discussing the consequences of the merger because it could have an immediate effect on employment in the city.
Also, long term (I am thinking 20-30 years out here) the earnings tax could impact InBev's decisions pertaining to production-based employment in StL.
Therefore, CS, I think the earnings tax is absolutely relevant to the discussion as to how an AB merger with InBev could impact the region.
The Central Scrutinizer wrote:goat314 wrote:This is going to be pretty devastating if this goes down. It is largely the fault of St. Louis though, because between city earnings taxes and a slew of other stupid sh*t this city does, who can prevent companies from being ate up or moving away. Lets face it this city and state are behind the times and operates like a city of the stone age. If those other major corporations leaving the area didn't change anything, hopefully if we lose Busch people will get a chance to step back and make some serious policy changes in this region. If we don't change with the times, its only a matter of time before the St. Louis metro starts losing population. Look at what is happening in Pittsburgh, Cleveland, and Detroit. It looks like we are next in line.
Wow, completely miss the mark much?
This has nothing, I repeat, nothing to do with city earnings tax. Or the city itself, for that matter.
I was not referring to this particular situation in conjunction with the city earnings tax. I was simply stating that between city earnings taxes and backwards policies, how do you expect companies to relocate or grow in the city?
The Central Scrutinizer wrote:goat314 wrote:This is going to be pretty devastating if this goes down. It is largely the fault of St. Louis though, because between city earnings taxes and a slew of other stupid sh*t this city does, who can prevent companies from being ate up or moving away. Lets face it this city and state are behind the times and operates like a city of the stone age. If those other major corporations leaving the area didn't change anything, hopefully if we lose Busch people will get a chance to step back and make some serious policy changes in this region. If we don't change with the times, its only a matter of time before the St. Louis metro starts losing population. Look at what is happening in Pittsburgh, Cleveland, and Detroit. It looks like we are next in line.
Wow, completely miss the mark much?
This has nothing, I repeat, nothing to do with city earnings tax. Or the city itself, for that matter.
You always miss the mark.
MSU South Sider wrote:^^Goat, I have to agree with the responses as well...I am not sure how the eTax (or city politics) applies to the employees working at the other 11 AB breweries in the U.S. AB is a publicly traded company...the city could agree to lift all taxes, build them a new downtown building and guarantee a 38 hour work week...and they still would be a candidate for acquisition as they are seen as a commodity to be purchased.
Now, I would be more keen to listen your argument if AB was saying that they were moving their operations to the county or out of state because of issues with the city, but being an acquisition target has absolutely nothing to do with city politics.
Again not referring to this situation in particular. Only implying that things like the city earnings tax and unwillingness to progress will always limit what the city can do and eventually begin hurting us in even more severe ways. I believe if we didn't have a city's earnings tax and opened up the region for progress, we would see a lot more 1st class organizations and might even be a consideration for an expanded world headquarters for many different operations.