Anheuser drops opposition to InBev takeover

Anheuser-Busch on Friday night dropped its opposition to a take­over by InBev, paving the way for a deal to create the world’s largest brewer within a matter of days.

The Belgian-Brazilian makers of Stella Artois appeared to have clinched the breakthrough in their effort to secure a friendly deal after raising their offer to $70 a share on Friday morning, giving the makers of Budweiser beer an equity value of $50bn.

Shares in Anheuser rose 7.5 per cent in Wall Street trading by midday to a record $65.91 as investors weighed the likelihood that a deal could now be signed at a higher price. In Brussels, InBev shares were 7.36 per cent higher at €44.50.

The new price is $5 above the initial offer of $65 per share made exactly one month ago. Anheuser refused to accept that price, and the escalating battle between the two parties recently entered the US courts, where InBev sued to determine whether it could remove Anheuser’s board of directors without cause and Anheuser sued over claims that InBev made in its regulatory filings. The two brewers — one a legendary American icon, the other the product of a 2004 cross-border merger that has since burgeoned into an international powerhouse — could agree to the remaining terms of a deal as early as this weekend, one insider said Friday.

The companies, if combined, would generate more than $36bn in revenue by producing 460m hectolitres of their well-known beers, including Anheuser’s Budweiser and Bud Light and InBev’s Stella Artois, Bass and Hoegaarden.

Among issues still on the table, however, are how InBev would honour Anheuser’s commitments to its employees and beer wholesalers, and whether Anheuser’s executives would retain roles in the merged company.

Tension between the two rivals had intensified in recent weeks. Anheuser rejected InBev’s initial offer as financially inadequate, and instead accelerated a cost-cutting programme which it said should boost its earnings and share price.

InBev responded by launching a process to remove Anheuser’s entire board of directors by winning the written consent of a majority of its shareholders.

People on both sides, however, have said throughout the saga that Anheuser might feel the best option for its shareholders was to hold out for a higher price. Anheuser, whose stock has languished over the past five years, was seen as having relatively few defences against InBev’s unsolicited bid.

Anheuser has pushed InBev in recent court filings to release more details about its financing plans, at a time in which the strength of a deal’s funding can make or break a transaction. InBev has said that a group of 10 global banks have committed to finance its bid through a package that includes at least $40bn of new debt.